Sheng Siong exceeds expectations as earnings hit $11m in Q2

Revenue grew by 7%.

Sheng Siong thrived in the second quarter as its earnings exceeded initial analyst expectations, driven by revenue growth and margin expansion.

According to OCBC, revenue grew 7% y-o-y driven by both same store sales growth (+4.7%) and new store sales (+2.7%).

Gross margins also improved sequentially to 24.7% (+0.9 ppts) on the back of more direct sourcing/bulk
purchasing activities.

“We believe margins will continue to expand from 1) more product lines procured through bulk purchases; 2) increased bulk purchase volumes; and 3) higher sales mix of fresh products. We expect SSSG to stay positive as well, since management has proven that marketing initiatives and store refurbishment have improved SSSG,” noted OCBC.