For its FY2024 ended Dec 31 2024, Sheng Siong got to bear with a 10% jump in staff costs equivalent to 15.4% of its revenue versus just 14.6% in FY2023. On the other hand, thanks to a more favourable sales mix, gross margin improved marginally to 30.5%.
Sheng Siong Group's FY2024 earnings missed the expectations of UOB Kay Hian but the company is seen to expand further at the expense of competitors. It has maintained a stable payout ratio and strong cash flow generation as well, prompting, analysts John Cheong and Heidi Mo have kept their "buy" call on the stock.
However, with staff costs likely to stay elevated from new hires and the progressive wage model structure, Sheng Siong might see higher costs. As such, they've slightly trimmed their target price from $1.93 to $1.92.
