As part of Budget 2024, Singapore households can claim and use S$300 in Community Development Council (CDC) vouchers from 3 January.
The government has dished out these CDC vouchers to 1.33 million households to help them manage cost of living challenges brought about by surging inflation.
S$150 of these vouchers can be used at participating hawkers and heartland merchants while the other S$150 can be used at eight different supermarkets.
The CDC voucher scheme was first mooted in 2020 to help defray the cost of living and the latest batch is part of the S$1.9 billion enhancement to the Assurance Package where Prime Minister Lawrence Wong pledged that Singaporeans will get more help with cost-of-living concerns.
Here are three Singapore stocks that should benefit from the distribution of these CDC vouchers.
Sheng Siong (SGX: OV8)
Sheng Siong is one of the largest supermarket chains in Singapore with 74 outlets across the island.
The group offers a wide assortment of live, fresh and chilled produce and also sells general merchandise such as toiletries and essential household items.
Sheng Siong is one of the eight supermarkets where the grocery CDC vouchers can be utilised.
The retailer reported a robust set of earnings for the first nine months of 2024 (9M 2024).
Revenue rose 4% year on year to S$1.1 billion while gross profit improved by 6% year on year to S$328.8 million.
Sheng Siong’s gross profit margin improved from 29.9% in 9M 2023 to 30.5% in 9M 2024.
The group’s net profit stood at S$109.1 million, up 8.7% year on year.
The business also generated S$141.3 million of free cash flow, up almost 13% year on year.
Sheng Siong opened four stores in 9M 2024 and aims to open at least three new stores per year.
The supermarket operator opened a fifth store at Block 512 Bishan Street 13 and also plans to open a new store at Toa Payoh by the end of 2024, making it a total of six stores opened for 2024.
Meanwhile, four HDB tenders are awaiting results and could contribute to Sheng Siong’s store openings for 2025.
DFI Retail Group (SGX: D01)
DFI Retail Group is a leading Asian retailer operating around 11,000 outlets and employing over 200,000 people.
The group owned well-known brands such as Giant, Cold Storage, 7-Eleven, and Guardian Health and Beauty and also operates in the home furnishing and restaurant space.
The CDC vouchers can be used at both Cold Storage and Giant Singapore.
DFI Retail Group reported a resilient financial performance for the first half of 2024 (1H 2024).
Revenue dipped slightly by 4% year on year to US$4.4 billion.
The group’s underlying net profit more than doubled year on year to US$76 million.
Because of the higher profit, the retailer upped its interim dividend by 17% year on year to US$0.035.
DFI Retail Group recently released its business update for the third quarter of 2024 (3Q 2024).
Hong Kong saw overall retail sales falling by 10% year on year as consumer sentiment was adversely impacted by cost-of-living pressures.
Despite a small 3% year-on-year decline in subsidiary sales, the retailer managed to eke out an underlying profit growth of 4% year on year for 3Q 2024.
DFI Retail Group also signed an agreement with MINISO Group (NYSE: MNSO) to divest its 21.08% stake in Yonghui Supermarket for RMB 4.5 billion.
Kimly Ltd (SGX: 1D0)
Kimly is one of the largest coffee shop operators in Singapore and operates a network of 86 food outlets, 176 food stalls, 11 restaurants, and four Tenderfresh kiosks.
The group’s Tenderfresh central kitchens also manufacture, process, and sell food products.
The coffee shop operator reported a mixed set of earnings for fiscal 2024 (FY2024) ending 30 September 2024.
Revenue inched up 1.8% year on year to S$319.4 million while gross profit edged up 1.9% year on year to S$90.6 million.
Net profit, however, fell by 6.8% year on year to S$31.7 million.
Despite the lower profit, Kimly continued to generate a positive free cash flow of S$82 million, just 1.6% lower than the prior year’s S$83.4 million.
A total dividend of S$0.02 was declared and paid for FY2024, up from the S$0.0168 paid out in FY2023.
Kimly intends to proactively seek out suitable new food outlets and continuously look out for potential merger and acquisition opportunities.
Meanwhile, the group is also working to diversify its product offerings and create unique dining experiences tailored to different market segments.
Over at its central kitchens, there are plans to enhance efficiency through the use of technology.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
