- We have upgraded DFI Retail Group (SGX:D01) to a BUY from HOLD with a P/E-based target price of US$3.90 implying 19% upside from current levels on a better 2023 outlook. We apply our 2023 EPS to a target P/E multiple of 30x, which is in line with the company’s past 5-year average .
- - Read this at SGinvestors.io -
- DFI Retail is due to report its 2022 earnings on 2 Mar 23. (see SGX companies earnings calendar)
Normalising in a post-COVID-19 world.
- - Read this at SGinvestors.io -
- In 2022, the Chinese economy materially slowed from 2Q, mainly due to the government’s zero-COVID strategy that disrupted logistics, retail sales and catering, all of which negatively affected DFI in its key markets of Hong Kong and China. However, the easing of COVID-19 restrictions in China from Dec 22 has seen increased economic activity as well as domestic and regional travel.
- As 2023 progresses, we expect this to translate to better earnings momentum. Importantly, China's Center for Disease Control and Prevention said there had been “no obvious rebound” during Chinese New Year in late-Jan and Feb 23, where millions reunited for family gatherings.
Potential for all business units to exhibit better y-o-y performance.
- Read more at SGinvestors.io.
