Dairy Farm

Re: Dairy Farm

Postby winston » Fri Mar 04, 2016 2:41 pm

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Dairy Farm’s (US$6.14, down 0.02) 2015 performance was impacted by the challenging retail environment, with both the Food Division and the Health and Beauty Division reporting lower profits, although most key businesses achieved positive like-for-like sales growth. The Home Furnishings and Restaurants Divisions reported good increases in both sales and profits.

Underlying profi t was US$428 million, 14% below 2014, while at constant rates of exchange it was down 13%(earnings per share were US¢31.66, down 14%). The profit attributable to shareholders in 2015 of US$424 million, including a net non-trading item of US$4 million arising mainly from a provision for closure of the Starmart chain in Indonesia, was 17% behind 2014.

In response to challenging trading conditions, the Board is recommending a reduced final dividend of US¢13.50 per share (US¢16.50 per share in 2014), giving a total dividend for 2015 of US¢20.00 per share, down 13% yoy.

Dividend yield is 3.26% at its last traded price of US$6.14.

Sales including 100% of associates and joint ventures increased by 37% to US$17.9 billion, including contributions from Yonghui Superstores and San Miu from the respective dates of acquisition. Sales for continuing businesses in US dollar terms were flat at US$13.1 billion, although at constant rates of exchange they were up 5%.

The Group’s operating cash flow remained strong with a net inflow of US$700 million, US$24 million higher than in 2014 largely due to tight inventory management. Lower capital expenditure resulted in the free cash fl ow before investments being US$396 million, a 19% improvement over 2014.

Net debt at the end of 2015 was US$482 million compared with net cash of US$475 million last year due to investment activities, including a US$912 million investment in Yonghui Superstores.

The Group, including associates and joint ventures, added a net 427 stores in 2015, including its interest in 382 Yonghui stores in mainland China and 15 San Miu supermarkets in Macau.

At 31st December 2015, the Group had 6,528 stores in operation in 11 countries and territories.

The operating environment for the Food Division was especially fragile in 2015. In the face of such headwinds, the performance in Greater China, including Hong Kong, was resilient.

Profits in Singapore and Malaysia were lower in challenging trading conditions. The results in the Philippines showed improvement.

Progress was made in developing the business in Indonesia, although margin investment, cost inflation and higher stock provisions continued to impact profi tability.

The convenience store operations in Hong Kong and mainland China performed well, but in Singapore regulatory restrictions dampened sales performance and profitability.

In the Health and Beauty Division, Hong Kong and Macau had a good year and reported further growth in sales and profits despite the well-publicized slowdown in Mainland tourist arrivals.

In Singapore, improved profits were achieved despite increased costs, but the overall results for the Division were held back by
a disappointing performance in Malaysia.

In Home Furnishings, the IKEA businesses had an outstanding year. Hong Kong and Taiwan traded well, while the first store in Indonesia performed ahead of expectations in its first full year following its opening in October 2014.

In the Restaurant Division, Maxim’s delivered another good performance. Satisfactory sales and profi ts growth were reported in most of its segments. The company continued to expand a number of formats across mainland China and to grow its Starbucks operations in Hong Kong and Vietnam.

The 15 store supermarket chain in Macau, San Miu, was acquired in March’15, reinforcing Dairy Farm’s well-established retail presence in the territory.

The integration of the business has been smooth and initial results have been promising. In April’15, the Group completed the purchase of a 19.99% interest in Yong hui Superstores in mainland China following receipt of the required regulatory approvals.

The Group is also soon to invest a further US$200 million in the company to maintain its interest following a proposed placement by Yonghui of a 10% shareholding to the Chinese internet retailer JD.com. In addition, the Group has established an on-line presence in Guardian Singapore, which is the first of several planned moves into e-commerce.

Consensus is expecting a 10% growth in net profi t in 2016 to US$466mln on the back of incremental contributions from Yonghui Superstores in China and San Miu in Macau and beer cost controls from lower commodity prices.

This translates to a forward PE of 17x which is almost 40% below its 15 year average of 28x and also below its current peer group average of between 20-30x. And with a yield of 3.26%, we maintain BUY on Dairy Farm.

Source: Lim & Tan
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Re: Dairy Farm

Postby winston » Thu Mar 10, 2016 10:18 am

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Dairy Farm (DFI SP): BUY
Market Cap: US$7,910m | Average Daily Value: US$2.49m
Last Traded Price: US$5.85; Price Target: US$7.03 (Upside 20.2%) (Prev US$7.03)

Turning more efficient

Expect more efficient operations by FY17F
We believe IT, procurement and supply chain investment should yield results by FY17F 2H15/FY15 earnings within expectations


Maintain BUY, TP US$7.03

Maintain BUY on compelling valuations. We maintain our BUY rating with an SOTP-based TP of US$7.03. DFI trades at an attractive valuation of 17.9x FY16F PE at -1SD of its 7-year mean.

With no major negative surprises in FY15 results, we continue to be positive on the stock. Strategies like DC enhancements and inventory management systems are being put in place to turn more efficient.

We expect growth to pick up in FY17F. The share price now values DFI’s core business at just 20x PE.


Growth supported by unit volume sales, better efficiencies.

DFI has been investing in IT, procurement and supply chain, and we expect this to at least yield some results by FY17F. We have already seen better inventory numbers in FY15 and we believe this should continue going into FY17F.

On the demand side, DFI will be to drive average unit volume growth via building products and brands that identify with customers.


FY15 results in line. FY15 results were within expectations.

Revenue was US$11.1bn (+1% y-o-y) while earnings were US$424m (-17% y-o-y). Flat revenues were dragged by currency translation in Malaysia, but operating margins improving sequentially in 2H15 on better operating efficiencies.

A final dividend of 13.5 UScts was declared, below our 16.5 UScts forecast. However, the dividend payout ratio is within the 59-69% range over FY09-14.


Valuation:

SOTP valuation methodology. Our target price of US$7.03 is derived from sum-of-parts valuation methodology. We value DFI's core business at US$6.64 based on DCF and the 20% stake in Yonghui based on the market value at US$0.75 and net debt at US$0.36 per share.

Key Risks to Our View:

Significant earnings disappointment. We expect earnings growth to accelerate into FY17F as management rings in better operating efficiencies. We believe it would take a significant earnings disappointment to derail our upside bias on the stock. Nonetheless, our earnings forecast is conservative.

Source: DBS

https://researchwise.dbsvresearch.com/R ... ibbikfdhjg
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Re: Dairy Farm

Postby winston » Tue May 03, 2016 3:58 pm

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Time: 2:48PM
Exchange: SGX
Stock: DairyFarm USD(D01)
Signal: Resistance - Breakout with High Volume
Last Done: $7.01

Source: UOBKH
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Re: Dairy Farm

Postby winston » Fri May 06, 2016 5:55 pm

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Dairy Farm (DFI SP, BUY, TP: USD8.50)

Profit Recovery In-Line for Our Conviction BUY Call

Results Review

Dairy Farm issued their interim statement for 1Q16 (the company only announces half-yearly, but provides some broad outlook statement in the interim), which is broadly in-line with our expectations of a profit recovery in 2016.

· Underlying earnings unchanged YoY, this stems a decline in place since last year

· Food division still under margin pressure, but increased contribution from Yonghui and San Miu acqusitions

· Home furnishing (IKEA) and Maxim (food catering) continues to do well

Share price has recovered from USD5.90 to USD6.90 since we upgraded to conviction BUY in March 2016, and we think it reflects the bottoming-out of profitability this year as per our investment thesis.

Our previous TP was USD8.60 (still 30% upside from here) and we think the catalyst for this will be further evidence of medium-term margin upside over the next twelve months.

Source: RHB
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Re: Dairy Farm

Postby winston » Fri May 06, 2016 5:57 pm

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March 21, 2016

A Once In a Decade Opportunity Market Cap: USD8,032m
Bloomberg Ticker: DFI SP

We believe consensus has underestimated the margin improvement potential in the medium term from Dairy Farm’s drive for
more direct sourcing and sale of corporate brands.

Share price and valuations are at their lowest point since 2010, presenting investors with a once-in-a-decade opportunity to accumulate this bellwether retail blue-chip.

Reiterate BUY, with a TP of USD8.50 (from USD9.10, 45% upside).

Source: RHB

http://rhb.ap.bdvision.ipreo.com/NSight ... 8a4fb078d7
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Re: Dairy Farm

Postby winston » Mon Aug 01, 2016 8:48 am

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Dairy Farm International's 1H earnings rise 4.1% rise to $269 mil

By Zavier Ong

SINGAPORE (July 28): Dairy Farm International, posted a 4.1% increase in earnings to US$199.3 ($269.4) million for the six months ended June from a year ago.

This was due to higher contributions from the Food, Home Furnishings, Restaurants and Yonghui hypermarket chain in China that helped offset lower contribution from the Health and Beauty Division.

Revenue declined 0.6% to US$5.56 billion, pulled down by the closure of a number of underperforming stores in Singapore and Indonesia.

“While sales and profit performance in the first half have been encouraging in a challenging trading environment, the outlook remains uncertain with consumer confidence fragile in most markets,” says Ben Keswick, Chairman of the group.

Looking ahead, improvements are being made to existing stores to enhance the shopping experience of customers, and its private label range is being expanded to offer consumers a choice of high quality products at lower prices.

In addition, the group will also seek to achieve greater efficiencies and productivity through investment in information systems and supply chain infrastructure.

The group has declared an interim dividend of 6.5 US cents.

Shares of Dairy Farm closed 0.9% lower at US$6.68.

Source: The Edge
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Re: Dairy Farm

Postby winston » Wed Aug 10, 2016 8:46 am

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Food for thought on Dairy Farm

By Gwyneth Yeo

SINGAPORE (Aug 8): RHB is sticking to its “buy” recommendation on Dairy Farm International Holdings with a higher target price of US$8.60 given the stock generates strong cashflow and is undervalued.

RHB notes the group’s home furnishings and restaurants divisions has grown strongly and expects the uptrend to continue.

In 1H16, operating profit from Dairy Farm’s food division rose 3.8%, reversing from the declines of the previous two consecutive years. This was the result of disciplined rationalisation of stores in Indonesia and Singapore, an improvement in its supply chain, and changes to the way each country is managed.

But the group’s key business driver is expected to come from fresh food provision which commands better margins, according to RHB.

“Penetration has increased by 2% over the past three years, and with the recent opening of its 75,000 sf fresh food distribution centre in Singapore, we expect management to push this strategy further across the company,” says RHB.

Meanwhile, Dairy Farm’s partnership with Yonghui in China could also improve its margins in its Food Division over the medium term.

RHB expects the opening of new stores in China to pick up pace following the partnership with Yonghui. The latter would contribute to the group’s local knowledge, increase sales per store, and enable Dairy Farm’s expansion to be more sustainable.

“We visited a Yonghui store in Shanghai, and came away impressed by its fresh food offering which Dairy Farm is trying to leverage upon,” says RHB in a note on Monday.

“With JD.com also recently becoming a shareholder in Yonghui, it could turn out to be an astute investment.”

Shares in Dairy Farm are trading at US$6.80.

Source: The Edge

http://smr.theedgemarkets.com/article/f ... 1-87358173
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Re: Dairy Farm

Postby winston » Thu Dec 08, 2016 10:44 am

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Dairy Farm International Holdings

CIMB has an “add” rating on Dairy Farm, with a target price of US$8.70.

“After two consecutive years of earnings declines, margins finally look like they have bottomed and we think it is now time to revisit the stock,” says Lim.

Lim adds that Dairy Farm is showing signs of recovery in previous problem markets Indonesia and Singapore, while its investments in Greater China are doing well.

CIMB is keeping its “overweight” rating on the consumers sector.

Shares of Dairy Farm are trading 11 cents higher at US$7.26.

Source: CIMB
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Re: Dairy Farm

Postby winston » Mon Mar 06, 2017 9:58 am

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Q16 analyst briefing key takeaway: 2016 was about margins, 2017 will be about driving sales

FY16’s earnings beat was driven by a much improved 2H, as margin improvement initiatives flowed through to the group.

2H16 OPM: 4.6%; 1H16: 3.5%; 2H15: 4.1%.

By geography, SEA is now doing much better (FY16 OP +43% yoy) while Greater China is flat.

Management’s focus heading into 2017 is now to maintain its margins and grow sales. We think the company is heading in the right direction.

Reiterate Add

Source: CIMB

https://brokingrfs.cimb.com/7A5XkD25X50 ... SZtZw2.pdf
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Dairy Farm International Holdings

Postby behappyalways » Tue Mar 07, 2017 5:45 pm

Improved margins for Dairy Farm only the beginning of an upcycle
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