- We think that rising commodity prices, particularly cocoa, have impacted Delfi's profitability and will lead to further margin contraction in 2024. Downgrade Delfi to HOLD with a lower target price of S$1.07 (S$1.76 previously).
2023 results slightly above expectations...
- - Read this at SGinvestors.io -
- - Read this at SGinvestors.io -
…but margins see significant contraction.
- For 4Q23, revenue growth was sustained (+5.6% y-o-y, +1.9% q-o-q), but gross and net profits fell substantially by >20% y-o-y. While this is partially attributable to the reopening post-COVID-19 in 2022, as well as increased promotions to counter competition, 1Q and 4Q are typically better-performing periods in preparation for festivities (Valentines’ Day and Lebaran).
- We are of the view that rising commodity prices, particularly cocoa, have impacted profitability and will lead to further contraction in 2024.
Record-high revenue driven by growth across markets and business lines.
- Read more at SGinvestors.io.
