Dairy Farm

[winston]

not vested

The New “Normal”; Keep BUY

Buy (Maintained)
Target Price (Return): USD4.47 (19.5%)
Price: USD3.74
Market Cap: USD5,059m
Avg Daily Turnover (USD/USD) 3.94m/3.94m

Maintain BUY and USD4.47 TP on Dairy Farm, c.20% upside and a 4% yield.

Hong Kong retail sales have remained fairly stable in July and August despite tightened restrictions during the period.

We think this sets the new minimum benchmark for Hong Kong retail sales as tourism spending
diminishes and locals decrease their discretionary spending.

With the COVID-19 situation stabilising in Hong Kong, retail sales should bottom-out from here.

Dairy Farm, with its large exposure to Hong Kong, should see an improving risk-reward ratio at the current share price.

Source: RHB

[winston]

not vested

Dairy Farm, which oversees brands such as Guardian and Cold Storage, saw improvements q-o-q in 3QFY2020, although it remains negatively affected by the pandemic.

Grocery retail performed strongly in North Asia, Singapore and Malaysia due to operational improvements and changing customer behaviours while performance in Indonesia was “significantly impacted” due to government restrictions.

Dairy Farm’s convenience and home furnishings businesses saw better performances q-o-q as well.

The group’s overall performance continued to be adversely affected by weaker results in its health and beauty segment.

The latter was impacted by government restrictions in a number of markets and lack of overseas tourists in Hong Kong.

Source: The Edge

[winston]

not vested

Dairy Farm (DFI SP, Add, TP US$4.50)

Although medium-term prospects are uncertain, sentiment for the stock is likely to improve, allowing it to trade at at least its -1 s.d. level, once recovery plays are revisited.

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

Source: CIMB

[winston]

not vested

Still attractively priced for the medium-term

Various HK retail sales categories saw mom improvements in Nov 20 despite
still declining yoy.

DFI’s valuation looks attractive to us and is still below long-term average. We
expect earnings to improve as a Covid-19 vaccine emerges in FY21F.

We reiterate our Add call with a higher TP of US$5.50, based on 22x P/E
(previously 19.5x) and after rolling forward to FY22F EPS.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... C72C6C0518

[winston]

not vested

Our Views

Earnings turnaround intact; maintain BUY with a lower TP of US$ 4.44. DFI’s transformation plan to turn around earnings is tracking well with margin improvements already seen in the supermarket business.

Attractive risk-reward. Share price is attractive c. -2 SD of historical mean PE, 3.9% dividend yield, and below peer average of 16.1x FY21F PE. DFI’s core business is implicitly valued at less than 10x FY21F PE.

Transformation the key catalyst. The ongoing transformation for South Asia supermarkets should drive earnings and share price re-rating.

Source: DBS

https://www.dbs.com.sg/treasures/aics/s ... DFI_SP.xml

[winston]

not vested

DairyFarm International (SGX: D01) on Thursday reported a full-year net profit of US$271 million, a fall of 16 per cent from a year ago, even as total sales increased 2 per cent to US$28.2 billion.

For the year ended Dec 31, 2020, the group said it recorded strong growth in operating profit for its grocery retail segment and Ikea, but this was offset by lower profits for the health and beauty as well as convenience businesses.

Source: Phillips

[behappyalways]

Dairy Farm International sees 85% drop in 1H21 earnings to US$17 mil on ongoing Covid-19 headwinds
https://www.theedgesingapore.com/capita ... g-covid-19

[behappyalways]

Dairy Farm reports lower earnings, to cut dividend
https://www.theedgesingapore.com/capita ... t-dividend