Sheng Siong’s Q1 profits grow 16.8% to $16.4m

Thanks to more government grants, new store growth.

Sheng Siong Group’s (SSG) 1Q16 results came in within our expectations. Revenue increased 5.1% YoY to S$208.5m and net profit grew 16.8% to S$16.4m, meeting 26% and 31% of our full year estimates.

Sheng Siong Group closed Q1 with a net profit $16.4m and revenue of $208.5m, reflecting growth of 16.8% YoY and 5.1% YoY respectively.

According to a report by OCBC, SSG enjoyed a relatively higher amount of government grants at $2.3m this quarter.

Moreover, revenue was driven by new store growth of 5.6%, but saw a slight 0.5% contraction in comparable same store sales growth on back of slower Chinese New Year demand and other factors cited in the previous quarter.

Notably, a lower cost structure pushed operating margins to a new high of 9.3%, compared to 7.5% in FY15.

Separately, the Kunming China subsidiary has inked a lease for their maiden supermarket at an approximate size of 54,000 sqft. It is slated to open in the last quarter of 2016.

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