RHB upgrades FY25–27 outlook for DFI and Sheng Siong

These results reinforce RHB’s OVERWEIGHT rating on the sector, with analysts pointing to its defensive positioning.

Positive earnings surprises from retail staples Sheng Siong (SSG) and DFI Retail Group (DFI) have prompted analysts at RHB to revise their forecasts upward, highlighting stronger-than-expected fundamentals across Singapore’s consumer staples sector.

Sheng Siong exceeded expectations by aggressively expanding its store footprint, securing eight new outlets to date—well above the initial full-year assumption of three.

As a result, RHB raised its FY25 earnings estimate for the supermarket chain by 4%, with a further 6% increase projected for FY26 and FY27.

Meanwhile, DFI delivered stronger underlying profitability despite flat revenue. The improvement came from disciplined cost controls and strategic restructuring, including the exit of loss-making assets.

RHB upgraded its earnings forecast for DFI by 2% across FY25 to FY27, citing clearer earnings recovery prospects.

These results reinforce RHB’s OVERWEIGHT rating on the sector, with analysts pointing to its defensive positioning, earnings resilience, and attractive dividends.

Supermarket retail sales in Singapore continue to trend positively, averaging 130 index points from January to April 2025—surpassing both 2023’s average of 124 and last year’s same-period reading of 128. This momentum is expected to support further growth for players like SSG.

DFI and SSG have both outperformed the Straits Times Index year-to-date, rising 34% and 20% respectively since the last update.

RHB maintains a BUY rating on both, with target prices of US$3.09 for DFI and $2.12 for SSG, each offering about 10% upside and a projected 4% dividend yield.