The Motley Fool

Which Singapore-Listed Supermarket Share Should Investors Buy Now? Part 1

There are two major listed supermarket shares in Singapore.

Dairy Farm International Holdings Ltd (SGX: D01) runs its retail business under brands such as GuardianCold StorageGiant Hypermarket, and 7-Eleven while Sheng Siong Group Ltd (SGX: OV8) operates its namesake-branded stores.

Interestingly, both company shares have outperformed the Straits Times Index (SGX: ^STI) in 2018. Given the interest in the companies, investors might want to know which of the two supermarkets they should consider investing now.

As such, I would like to put both companies up for a side-by-side comparison. To start, I will compare the earnings performance of both companies for the first half of the year. The objective is to find out which of the two did a better job.

The showdown

Let’s begin with Dairy Farm.

For the first half this year, Dairy Farm sales grew by 8% year-on-year to US$5.9 billion. Similarly, profit attributable to shareholders was up 6% year-on-year. Excluding non-trading activities, underlying profit attributable to shareholders rose 2% year-on-year to US$215 million. As a result, underlying basic earnings per share was up 2% year-on-year to US$0.1588.

Next we have Sheng Siong.

For the first six months ended 30 June 2018, Sheng Siong reported that sales grew by 5.4% from a year ago to S$441.3 million. Similarly, gross profit was up 9.4% year-on-year to S$117.9 million. As a result, net profit attributable to shareholders improved by 6.5% year-on-year to S$35.4 million.

The Foolish conclusion

In sum, both companies delivered growth in their top and bottom line. Here, Dairy Farm came ahead in terms of revenue growth while Sheng Siong did better in terms of net profit growth. The overall result is a tie for the first round.

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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. Motley Fool has recommendations for Dairy Farm International Holdings Ltd and Sheng Siong Group Ltd.