Sheng Siong shares continue last week’s slide, falls 7.9% after modest Q3 earnings growth

Shares of supermarket operator Sheng Siong continued to decline on Monday (Nov 2), falling as much as 7.9 percent in early trading after the company reported a slight 1.9 percent year-on-year increase in net profit for Q3. The stock had dropped 4.6 percent or S$0.13 to S$2.67 on Friday before opening down 7.1 percent at S$2.48 on Monday.

It subsequently fell to S$2.46, a 7.9 percent decrease, by 9.16 am. Trading volume reached 4.7 million shares as of 10.10 am. No married deals were reported. Sheng Siong's net profit for the quarter ended Sep 30 was S$44.6 million, up from S$43.7 million in the same period last year, while revenue rose 6.2 percent to S$441.5 million from S$415.5 million a year earlier.

The increase in profit was attributed to a larger store network in Singapore and improvements in comparable same-store sales. The decline in stock price also comes after management commented on the competitive nature of the grocery retail landscape, with promotional activities potentially putting pressure on revenue and margins.

The company expects the upcoming Johor Bahru-Singapore RTS Link, set to begin operations in February 2027, to further intensify competition due to potential cross-border shopping and heightened price pressure on selected packaged groceries and household products. Sheng Siong plans to adapt its strategies as the project unfolds. The group also noted rising labor costs, including wage increases under the Progressive Wage Model and guidelines set by the National Wages Council for 2026-2027, as another challenge.

Despite these pressures, Sheng Siong remains committed to expanding its store network, especially in areas with limited presence. CEO Lim Hock Chee stated that the company will continue to prioritize expansion in such areas to reach more customers.