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9 Simple Numbers For Investors To Understand Sheng Siong Group Ltd

Sheng Siong Group Ltd (SGX: OV8) is one of the largest supermarket chains in Singapore. Currently, it has a network of 42 stores in the country that are primarily located in the heartland areas.

It has also been a solid long-term winner with its stock price up by 116% over the past five years. Here are 10 numbers that can help investors gain an understanding of its business:

1. 5-year revenue growth rate: From 2011 to 2015, Sheng Siong has grown its revenue from S$578.4 million to S$764.4 million. That’s a compound annual growth rate of 7.2%.

2. 5-year profit growth rate: Sheng Siong’s net profit has grown at a much faster pace than its revenue. Over the same period as above, the supermarket operator’s profit has climbed at a compound annual rate of 20.1%, from S$27.3 million to S$56.8 million.

3. Store count growth: As already mentioned, Sheng Siong currently has 42 stores in operation (this excludes one store that is expected to reopen in the first-quarter of 2017 after renovation is done). This is nearly double the 23 stores that Sheng Siong reported at the end of 2011’s third-quarter.

4. Gross margin: Sheng Siong ended 2015 with a gross margin of 24.7%. There has been a steady increase in the company’s gross margin over the past few years. In 2011, 2012, 2013, and 2014, Sheng Siong reported gross margins of 21.1%, 22.1%, 23.0%, and 24.2%, respectively.

5. Return on equity: Sheng Siong’s return on equity in 2015 is 23.6%, according to S&P Global Market Intelligence. The company has actually been able to keep its return on equity above 20% since 2011.

6. Gearing: Sheng Siong’s total debt to equity ratio (or gearing) is 0%. This healthy balance sheet puts the company in a good position to weather through bad times and invest in its business during good times.

7. Dividend track record: Sheng Siong has consistently paid an annual dividend since its listing in 2011. Its dividend has also increased from 1.77 cents per share in 2011 to 3.5 cents in 2015.

8. The price-to-earnings ratio: At its current share price of $0.935, Sheng Siong has a P/E ratio of 23. This is nearly twice the SPDR STI ETF’s (SGX: ES3) P/E ratio of 12. The SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market barometer, the Straits Times Index (SGX: ^STI).

9. The price-to-book ratio: The company carries a P/B ratio of 5.8. This is again higher than the SPDR STI ETF’s P/B ratio of 1.2.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.