Delfi - CGS-CIMB Research 2022-11-16: Continue To Deliver

Delfi - Continue To Deliver

  • Delfi (SGX:P34)’s 3Q22 revenue of US$112.0m (+28.7% y-o-y; -1.1% q-o-q) was supported by a record US$42m from regional markets (the Philippines, Malaysia and Singapore), likely benefitting from the successful launch of its “Better for You” campaign. Revenue from Indonesia grew 31.8% y-o-y from a low base due to COVID-19 a year ago but was weaker q-o-q, likely from a combination of seasonality factors and the weaker rupiah against US$, its reporting currency.
  • Delfi’s 9M22 PATMI of US$26.9m was a beat at 82% of our FY22F forecast, suggesting lower non-operating expenses, such as depreciation and amortisation. We note that year-to-date capex of US$2.0m is significantly lower than FY21’s US$6.9m.
  • Although the seasonally stronger 4Q22F with Christmas and the holiday season should continue to drive sales growth, Delfi has cautioned about potential macro headwinds, such as currency volatility, supply chain bottlenecks and inflationary pressures.
  • We think Delfi may have to absorb any drastic cost increases that could disrupt consumption behaviours, especially if economic conditions deteriorate. Purchases of raw material are also typically denominated in US$ and the strong US$ could compound cost pressures.
  • Nevertheless, Delfi has mentioned that its Premium format category has observed better sales growth, supporting its strategy of product premiumisation that tends to be more demand inelastic.
  • We increase our FY22F/23F/24F earnings forecast for Delfi by 4.3%/3.5%/4.2% on lower administrative expenses, which include depreciation and amortisation. We reiterate our ADD call on Delfi but our reduced target price is a result of a lower P/E multiple of 15x from 17x previously as we roll forward our valuation to FY24F.
  • Delfi's Share Price is currently trading at an attractive 9.5x forward P/E, 1 standard deviation below its historical average, and a steep discount to peers’ average of 20x while providing a yield of ~5%, based on a 50% payout ratio that is supported by a strong net cash position of US$67.3m.

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 | 2022-11-16
SGX Stock Analyst Report ADD MAINTAIN ADD 1.26 DOWN 1.280

Previous report by CGS-CIMB:
2022-08-12 Delfi - Ample Reason To Share The Joy

Relevant links:
Delfi Analyst Report,
Delfi Target Price,

Delfi Share Price History,
Delfi Announcements,
Delfi Dividends/ Corp Actions,
Delfi News Articles


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