Sheng Siong Group: Q226: Modest beat and CDC support continues

Research evidence excerpt

Sheng Siong Group: Q226: Modest beat and CDC support continues

Forecast returns

Forecast price appreciation 4.3%

Forecast dividend yield 2.3%

Forecast stock return 6.6%

Market return assumption 7.1%

Forecast excess return -0.5%

Company Description

Sheng Siong Group Ltd (SHEN) is a leading Singapore supermarket chain focused on

affordable daily essentials and fresh produce. Founded in 1985 by the Lim family, it has grown

to 87 stores across Singapore and six in China as of end-2025, primarily serving heartland

communities through a one-stop wet-and-dry format. SHEN's everyday low-price positioning,

supported by direct sourcing and efficient operations, underpins strong customer loyalty and

margins.

Valuation Method and Risk Statement

We value Sheng Siong (SHEN) using a DCF-based valuation approach with a WACC of 5.6%

(2.1% risk free rate, 0.7 beta, 5.7% cost of equity, no debt).

Country and industry-specific downside risks include: 1) factors affecting consumer

purchasing power, such as slowing economic growth, higher inflation and higher

unemployment rate; 2) natural disasters; 3) regional economic changes; 4) changes in

consumer behaviours and shifting preferences for different formats of groceries; 5) industry

consolidation resulting in an overall increase in competitive pressure; and 6) regulatory risks

relating to land and property rights.

Country and industry-specific upside risks include: 1) any and all factors that can affect

consumer purchasing power, such as higher economic growth, slowing inflation, and lower

unemployment rate; 2) regional economic changes that could benefit the SGD; 3) industry

consolidation as SHEN could gain share from traditional retail and other grocery players.