- 3Q19 revenue was within our expectations. Net earnings exceeded our estimates due to better gross margins and other income (grants). New stores drove revenue growth of 11% in 3Q19 and gross margins were better than expected due to higher fresh food sales mix.
- Sheng Siong (SSG) secured another three new stores in for 4Q19/1Q20. The cumulative six new stores will expand footprint by 8% and support revenue growth in FY20e.
- We bumped up our FY19e earnings by 2% due to higher margins and other income. Our ACCUMULATE recommendation is maintained. Together with the rise in FY19e earnings, our target price is raised to S$1.32 (previously S1.30). New stores, market share gains and higher margins are translating to record earnings for SSG despite sluggish consumer spending in Singapore.