Sheng Siong shares continue last week’s slide, fall over 9% to hit one-year low
The company says competition in grocery retail could intensify over the coming year
[SINGAPORE] Shares of supermarket operator Sheng Siong continued to fall, dropping as much as 9.4 per cent on Monday (Nov 2) morning.
This is despite the group reporting a marginal 1.9 per cent year-on-year increase in third-quarter net profit on Thursday evening.
The stock had closed down 4.6 per cent or S$0.13 at S$2.67 on Friday.
The counter opened on Monday down 7.1 per cent at S$2.48 as at 9.01 am, before slipping to S$2.46 as at 9.16 am.
It fell further to S$2.42, down 9.4 per cent, as at 10.44 am. This is the lowest level the stock has reached since Nov 3, 2025, when it hit S$2.33 in intra-day trade.
Sheng Siong then rose slightly to reach S$2.43 by the midday trading break.
Some 10.7 million shares changed hands as at 1.44 pm. No married deals were reported, according to data from ShareInvestor.
On Monday, DBS Group Research maintained a “hold” rating on Sheng Siong, while CGS International rated the stock “add”. Phillip Securities and UOB Kay Hian assigned “neutral” and “hold” ratings, respectively.
Earlier, on Oct 30, HSBC downgraded the stock to “reduce”, while UBS maintained a “neutral” rating. On Oct 29, Citi also rated the stock “neutral”.
The mainboard-listed supermarket operator reported a net profit of S$44.6 million for the three months ended Sep 30, up from S$43.7 million in the corresponding year-ago period.
Revenue for the quarter rose 6.2 per cent to S$441.5 million, from S$415.5 million a year earlier. The group attributed the increase to a larger store network in Singapore, as well as improvements in comparable same-store sales.
The stock’s decline also comes after management said during its Q3 results briefing that the grocery retail landscape remains competitive, with sustained promotional activity potentially putting pressure on revenue and margins.
Competition could intensify further with the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link, which is expected to begin operations in February 2027. The link could encourage more cross-border shopping and heighten price competition for selected packaged groceries and household products.
Sheng Siong said it would adapt its strategies as developments surrounding the RTS Link unfold, in order to address the potential impact on its business.
Beyond competition, the group also flagged rising labour costs as another challenge. These include wage increases under the Progressive Wage Model and the National Wages Council’s guidelines for 2026 to 2027.
The group had raised the salaries of its retail workers in September last year to meet Progressive Wage Model requirements for the retail sector.
DBS analyst Chee Zheng Feng said in a note on Friday that he expects Sheng Siong’s earnings growth to moderate further in the fourth quarter, as it comes down from a high base boosted by SG60 vouchers.
Another potential factor is the full-quarter impact of the Thomson Imperial Court store’s closure on Sep 25, while higher utility prices and rising staff costs could also weigh on the supermarket chain’s profitability, he added.
The brokerage maintained a hold and unchanged target price of S$3 for the counter.
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