He also expects Macrovalue, the recent acquirer of Cold Storage and Giant, to give up unprofitable store locations, paving the way for Sheng Siong to open even more stores.
Sheng Siong Group's planned store openings for FY2025, leading to potentially better earnings, is viewed positively by analysts such as Citi Research’s Gan Huan Wen raising their respective target prices. "Sheng Siong's six new stores in the pipeline will take full-year store additions to eight, much higher than previously guided minimum of three,” states Gan in his April 30 note.
Sheng Siong has won four out of the six recent HDB tenders, with another two stores planned to open in retail malls Kinex and The Cathay. "We understand all but one of these stores were previously operated by a competitor. We are positive on this, given locations with former supermarket tenants generally have a quicker payback period,” says Gan, who has raised his target price from $1.90 to $2.05.
