While he admits that the new stores may be performing well without a need for substantial promotions, he notes that GP margins may plateau in FY2025 due to stronger competition in new areas of expansion.
Citi analyst Chong Zhou has maintained his “buy” call on Sheng Siong with an upgraded target price to $1.74 from $1.68. The upgrade comes as Zhou expects the group to see improvement in its FY2024 margin alongside stronger FY2025 revenue growth, due to new property acquisitions. Sheng Siong’s financial year ends in December.
In his report dated Oct 9, Zhou notes that new store opening promotions were less substantial than expected in 3Q2024, leading to improved gross profit (GP) margin assumptions for 2HFY2024.
