Delfi - CGS-CIMB Research 2022-08-12: Ample Reason To Share The Joy

Delfi - Ample Reason To Share The Joy

  • Delfi (SGX:P34)'s 1H22 revenue of US$246.3m was ahead of expectations at ~56% of our and consensus’ FY22F estimates and surpassed pre-COVID levels of US$226.9m in 1H19.
  • The resilient sales momentum was spurred by the economic recovery post-pandemic with revenue growth recorded across all markets and across own/agency brands. Revenue growth of 17.0% y-o-y outpaced opex growth of 5.7% y-o-y, allowing Delfi to enjoy operating leverage, as Delfi recorded core net profit of US$19.4m (+38.6% h-o-h, +61.5% y-o-y) in 1H22, beating expectations at 74.3% and 72.2% of our and consensus’ FY22F estimates respectively.
  • We share Delfi management’s optimism on the growth prospects of its key operating markets in Indonesia and the Philippines, where healthy GDP growth expectations could continue to support higher consumption levels of chocolate confectionery and adjacent food categories. Furthermore, Delfi’s revenue growth of 16.1% in Indonesia, where it is the market leader with a ~40% share of retail value in the confectionery space, had outpaced the market’s growth, according to management.
  • Despite rising costs of raw material, Delfi saw its gross profit margins remain resilient at 29.4% (+0.4% pt y-o-y). The management said it will continue to keep a close eye on COGS (cost of goods sold), but operating expenses is likely to trend upwards as Delfi reinvests into the business by resuming sales and marketing expenses that were deferred during the pandemic.
  • We increase our FY22F/23F/24F earnings per share (EPS) forecast for Delfi by 26.5%/24.4%/24.3% as we foresee lasting operating leverage on sustained revenue momentum, which would support Delfi's attractive dividend yields of ~5%. We raise our target price for Delfi to S$1.28, pegged at 17x of our FY23F P/E, its historical average since FY18 post disposal of cocoa ingredients business and revamping of its product portfolio.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

TAY Wee Kuang CGS-CIMB Research | Izabella TAN CGS-CIMB Research | 2022-08-12
SGX Stock Analyst Report ADD MAINTAIN ADD 1.28 UP 1.090

Previous report by CGS-CIMB:
2022-05-19 Delfi - Picking Up Where It Left Off

Check out the most recent target prices at Delfi Target Prices. Listing of analyst research reports at Delfi Analyst Report.

Relevant links:
Delfi Share Price History,
Delfi Announcements,
Delfi Dividends & Corp Actions,
Delfi News Articles


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