$Sheng Siong (OV8.SG)$ OCBC have kept its "buy" call on She...

OCBC have kept its "buy" call on Sheng Siong with a slightly lower fair value estimate (or tp) of 1.92 from 1.94 previously.

The lower estimate was due to the adjustments on sales growth, gross margin and administrative expenses (due to higher staff and utilities costs) estimates.

Meanwhile, the group remains a defensive play amid rising inflation and slower economic growth.

Though the demand for groceries will continue to normalise in 2023 from Covid-19, this could potentially be supported by a shift in consumption patterns as consumers focus on items that are value for money due to inflationary pressures and a higher cost of living.

Moreover, grocery sales could be supported by the inflation offset measures announced during the Singapore Budget 2023 such as the GST Voucher scheme as well as the Assurance package.