Dairy Farm

Re: Dairy Farm

Postby winston » Fri Mar 06, 2020 7:43 am

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Dairy Farm FY2019 underlying net profit falls 10%

PAN-ASIAN supermarket and convenience store operator Dairy Farm's underlying net profit fell 10 per cent to US$321 million in 2019 as social unrest in Hong Kong disrupted operations in its home market during the second half of the year.

After taking into account one-off business restructuring costs incurred in 2018, net profit rose 282 per cent to US$324 million in 2019, up from a restated US$85 million in 2018.

Revenue in the 12 months ended Dec 31, 2019 fell 5 per cent to US$11.2 billion, the group said on Thursday.

The Hong Kong turmoil had the greatest impact on Mannings because of the significant reduction in the number of visitors from the Chinese mainland to Hong Kong, said Dairy Farm, which is part of the Jardine Matheson Group.

It added: "Ongoing investments in the IKEA store network in the year also reduced group profitability. Offsetting these impacts was a significant improvement in profitability in our South-east Asia grocery retail business, as the space optimisation plan took effect."

Operating profit for the group's grocery retail business jumped from US$22 million in 2018 to US$63 million in 2019, despite a fall in sales. The group is executing a multi-year transformation plan for its South-east Asian grocery retail business, it said, adding: "While the turnaround remains at an early stage, there are encouraging signs."

In Hong Kong, Dairy Farm benefited "to some extent" from the diversified mix of its businesses. It said: "While there was disruption to stores, a clear trend towards more eating at home supported solid like-for-like sales growth for Wellcome Hong Kong.

"Performance for our convenience format was pleasing with sales and profit ahead of last year. This is despite challenging conditions in the second half. In order to continue to build store traffic and brand differentiation, aggressive development of ready-to-eat and the Own Brand range was a key focus. This will continue in 2020."

Full-year underlying earnings per share was 23.72 US cents in 2019, down 10 per cent from 26.48 US cents in 2018.

Full-year earnings per share was 23.93 US cents in 2019, up 282 per cent from 6.27 US cents in 2018.

A final dividend of 14.50 US cents per share was declared, giving a total dividend of 21 US cents per share for 2019, which is in line with 2018. The final dividend is payable on May 13.

Chairman Ben Keswick said: "While difficult market conditions in Hong Kong impacted the group's financial performance during the year, the multi-year transformation of the Dairy Farm Group continued to gain momentum during 2019, with signs of progress across our businesses.

"The group's space optimisation plan, new store formats and improvement programmes together generated greater efficiencies and started to deliver tangible results. We expect this progress to continue in 2020, although the group's results are being materially impacted by the ongoing Covid-19 outbreak. Performance for the remainder of the year will depend on the duration, geographic extent and impact of the outbreak and the measures taken to control it."

Separately, Dairy Farm said on Thursday that the roles of chairman and managing director, which are currently held on a combined basis by Mr Keswick, will be separated with effect from June 15. Mr Keswick will remain as chairman, and John Witt will take on the role of managing director.

Dairy Farm shares fell seven US cents or 1.45 per cent to US$4.75 on Thursday before results were released after market close.

Source: Business Times

https://www.businesstimes.com.sg/compan ... t-falls-10
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Re: Dairy Farm

Postby winston » Fri Mar 06, 2020 9:48 am

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Dairy Farm (DFI SP, NEUTRAL, TP: USD5.05)

Headwinds From High Exposure To North Asia

Results Review

Stay NEUTRAL with a new USD5.05 TP from USD6.63, 6% upside plus 4% yield.

FY19 results were below expectations while full-year PATMI of USD326m met 92% of our estimate.

Social unrest in Hong Kong during 2H19 impacted sales growth and profitability for the health & beauty unit, as well as Dairy Farm’s associate – Maxim’s.

Looking ahead, we think the headwinds remain, as the outbreak of COVID-19 should continue to put downward pressure on these two businesses’ sales.

Source: RHB

https://research.rhbtradesmart.com/atta ... f00893.pdf
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Re: Dairy Farm

Postby winston » Fri Mar 06, 2020 10:13 am

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Still cold up North

FY19 core net profit (-10.4% yoy) was in-line at 100.2% of our forecast (US$320.1m), but below at 94% of consensus (US$341.5m).

HK retail remains weak. Covid-19 outbreak also clouds near-term convenience and restaurant earnings, in our view. We cut FY20-21F EPS.

We reiterate Reduce, with a lower TP of US$4.38, now at 17x, the Global Financial Crisis (GFC) level in FY08-09, as we roll forward to FY21F EPS.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 64BBE3D125
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Re: Dairy Farm

Postby winston » Fri Mar 06, 2020 1:28 pm

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What’s New

2H19 earnings below as sales and margins disappoint

Final DPS of 14.5 UScts declared

Cut FY20-21F earnings by 10-12%

Maintain HOLD with lower SOTP-based TP of US$5.20

Source: DBS

https://researchwise.dbsvresearch.com/R ... =fcbbgkhaa
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Re: Dairy Farm

Postby behappyalways » Fri Mar 06, 2020 2:59 pm

Dairy Farm FY19 earnings jump to US$324 mil on absence of one-off restructuring cost
https://www.theedgesingapore.com/capita ... uring-cost
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Re: Dairy Farm

Postby winston » Thu Apr 09, 2020 9:14 am

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Positive On Groceries, Negative For Other Formats
Neutral (Maintained)
Target Price (Return): USD4.95 (+2%)
Market Cap: USD6,561m

Maintain NEUTRAL with new TP of USD4.95, from USD5.05, 2% upside.

More countries are imposing movement restrictions to contain the spread of COVID-19.

Dairy Farm, being a major player in the grocery retail segment, is likely to see its supermarket sales improve on the increased number of people staying at home. However, this positive upswing could be offset by declines in its other formats.

Source: RHB

https://research.rhbtradesmart.com/atta ... d5bcaa.pdf
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Re: Dairy Farm

Postby winston » Thu Apr 30, 2020 11:21 am

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What’s New

Weak performance for Health & Beauty and Convenience Stores anticipated for 1Q20

FY20-21F earnings lowered by 18-19% to reflect the weakness in those segments

Transformation on track for South East Asian Supermarkets despite near term headwinds

Valuation attractive at -0.5 SD of historical mean, >4% dividend yield; maintain BUY on a lower TP of US$5.10

Source: DBS

https://researchwise.dbsvresearch.com/R ... =fdffgkhea
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Re: Dairy Farm

Postby winston » Thu Jul 30, 2020 8:45 am

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Dairy Farm International on Wednesday posted a 35-per-cent drop in net profit to US$115 million, despite a 6 per cent increase in total sales to US$14.5 million.

Source: Phillips
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Re: Dairy Farm

Postby behappyalways » Thu Jul 30, 2020 2:34 pm

Dairy Farm posts 35% drop in 1H earnings to US$115 mil on pandemic-related restrictions
https://www.theedgesingapore.com/capita ... strictions
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Re: Dairy Farm

Postby winston » Thu Sep 10, 2020 9:41 am

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Back at palatable valuations

Share price has retraced closer to YTD trough of US$3.70, at 17.2x forward P/E (close to -1.5 s.d. of historical mean), pricing in the weaker FY20F.

Medium-term prospects are uncertain, but we think sentiments for the stock will improve, at least to its -1 s.d. levels, once recovery plays are revisited.

We view the risk-rewards as favourable for longer-term investors.

Upgrade our call to Add, with a lower TP of US$4.50 (on unchanged 20x FY21F P/E).

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... CC2834E534
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