Highlights

• SSG reported 1H26 revenue of S$855m and earnings of S$81m, meeting our 2026F forecasts at 50.7% and 51.3% respectively.
   
• SSG opened four new stores in 1H26, with three more expected in 3Q26. This comes above the company’s annual target of 3-5 new stores.
   
• Maintain BUY with a 9% higher target price of S$3.71, pegged to 32x 2027F PE or +3SD above its long-term historical mean.
   

Analysis

• 1H26 results in line with expectations. Sheng Siong Group’s (SSG) 1H26 revenue of S$855.4m (+11.9% yoy) and earnings of S$81.0m (+11.9% yoy)
  are largely in line with expectations, forming 50.7%/51.3% of our full-year forecasts respectively. The strong performance is driven by contributions from 16 new stores, alongside 3.3% same-store sales growth. Gross profit margin grew to 31.8% in 1H26 (1H25: 30.8%), supported by improving sales mix and gradual price increase. Net profit margin came in at 9.5% in 1H26, stable yoy.
   
• Healthy expansion pipeline supports long-term growth. SSG expects to open three new stores in 3Q26 (Hougang, Rivervale Crescent and
  Woodlands), further strengthening its presence across Singapore. This brings the total confirmed number of new stores in 2026 to seven, above the management target of opening three to five new stores annually. Expansion visibility also remains healthy, with one HDB tender awaiting results and two m,additional HDB sites expected to be released over the next six to 12 months.
   
• SSG declared an interim dividend of 3.75 S cents in 1H26 (+17% yoy; 1H25: 3.20 S cents), representing a payout ratio of 70%, in line with historical
  levels. This is supported by a robust net cash position of S$4.02m with zero borrowings as at end-1H26, and implies a 2026F yield of around 2.3%.