Citi’s analysts says Macrovalue’s acquisition of DFI Retail and Giant will allow Sheng Siong to grow market share with less competition.

Sheng Siong Group’s CEO Lim Hock Chee has received a total compensation of $7.064 million for the FY2024 ended Dec 31, 2024, up 20.6% y-o-y from the $5.86 million he received in FY2023. 

Similarly, Lim’s two brothers Lim Hock Eng and Lim Hock Leng, who are co-founders of the supermarket chain, received compensation of $7.013 million and $7 million respectively. 

According to Sheng Siong’s annual report, the CEO’s base salary was $303,000, with a variable bonus of $6.66 million. His brothers also received a variable bonus of $6.6 million. 

The annual report also states that the remuneration of the 10 key management personnel who are not directors nor CEO of the company, adds up to about $6.1 million. This is lower than the $8 million total compensation in FY2023. 

In his CEO’s address in the annual report, Lim highlights external uncertainties such as geopolitical tensions and global trade conflicts that could impact consumer sentiment and supply chain stability. 

He notes that the group’s cash and cash equivalents for FY2024 stood at $353.4 million, a 8.9% y-o-y increase from the year before, ensuring liquidity to navigate uncertainties and capitalize on emerging opportunities. 

Lim notes that the group continues to invest in automation to improve operational efficiency and enhance profit margins. With six new store openings in Singapore in 2024, and eight tender resultings pending ahead, the CEO says that expansion in Singapore remains top of mind.

While the group opened its sixth store in Kunming, China in 2024, Lim notes that the group will monitor market dynamics and expansion opportunities in a measured and sustainable way. 

In end March, Malaysian retail group Macrovalue acquired all of DFI Retail’s Cold Storage and Giant supermarkets in Singapore for $125 million. The deal includes 48 Cold Storage and 41 Giant outlets and the acquisition is expected to be completed in 2HFY2025. 

Citi’s analyst Huan Wen Gan says that Sheng Siong will benefit from Macrovalue’s acquisition of DFI’s supermarket business, as it could accelerate the closure of unprofitable locations, allowing the group to grow market share with less competition. 

Huan raised his target price to $1.90 from $1.74 previously, and believes that the stock will likely be driven by earnings growth over the next one year. 

Shares in Sheng Siong closed 1 cent higher or 0.61% up at $1.65 on Apr 4.