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Sheng Siong Group (SGX: OV8): Is It Worth Investing?

2 min read

For our Morning Stocks Analysis, the Seedly team worked closely with ShareInvestor.com, who is an expert in the field, to curate unbiased, non-sponsored content to add value back to our readers.

Disclaimer: This is not a sponsored post.

In Seedly Community, someone posted a question on Sheng Siong Group too. Feel free to give your point of view or read members’ insights here.


Sheng Siong Group (SGX: OV8)

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With innovation being the key driver in today’s environment, what is the outlook for Sheng Siong in its niche positioning of being a heartland supermarket brand? How can it defend its market share against e-commerce players in this competitive landscape?

Sheng Siong Supermarket was founded in 1985 by the Lim brothers (Lim Hock Eng, Lim Hock Chee and Lim Hock Leng) when they started their first Sheng Siong store in Ang Mo Kio Ave 3, which is still in operation today. They are currently on track to open its 50th store this year.

In a recent interview with The Business Times, CGS-CIMB analysts indicate Sheng Siong as “no lack of opportunities” for further growth over the next four years.

Let’s look at how Sheng Siong Group is scoring based on ShareInvestor’s grid:

Price movements of Sheng Siong Group

With its IPO price at 0.33 cents in August 2011, the group has increased to 1.10 cents as of 24 October 2018, with a 4.76% on just that day alone.

In terms of price movement, even when there is a slight decline in its year on year high, there is a strong support for its incremental year on year low.

Compound Annual Growth Rate of Sheng Siong Group

Reviewing historical CAGR data, the company is also showing positive performances across the ups and downs of both business and market cycles.

However, considering that CAGR does not reveal growth volatility, we can look at forwarding estimate to have a sensing of the pace of growth and momentum that can be carried into future years.

Forward Estimates of Sheng Siong Group (SGX: OV8)

 

With strong estimates put forth by the analysts based on growth forecast, 5 analysts reviewing Sheng Siong as BUY and 2 as Hold in October 2018.

Looking further into its cash flow estimates, it is also showing a positive set of numbers based on declining capital expenditure and an increasing 43% free cash flow on actual 12 months trailing (Jun 2018) vs Dec 2020 full year estimates.

Despite the fact that Sheng Siong does not have a competitive advantage versus the evolving landscape, is it still a good stock to include in your portfolio? Leaving you with ShareInvestor’s consensus estimates.

Happy Investing!


Seedly Contributor: ShareInvestor.com

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