- DFI Retail Group (SGX:D01)’s 2H23 revenue was flat y-o-y, while reported PATMI improved to US$24m (1H23: US$8m, 2H22: -US$57m).
FY23 results disappointed
- DFI Retail's FY23 underlying PATMI of US$155m disappointed at 92%/87% of our/Bloomberg consensus’ forecasts, after stripping out exceptional items, such as:
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- disposal loss of Malaysia Grocery (-US$54m),
- business restructuring costs (-US$11m),
- Yonghui impairment (-US$10m), and
- gain on sale of properties (US$59m).
Structural changes to HK retail landscape
- While the reopening of the Hong Kong (HK)-Mainland China border has helped with profit recovery of DFI Retail’s health and beauty segment and associate Maxim’s in FY23, we think the northbound spending shift by HK residents to neighbouring Chinese cities could be a dampener to DFI Retail’s grocery and convenience HK business in FY24F.
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- DFI Retail plans to tweak its product assortments and improve its value proposition to better appeal to tourists and gain market share from traditional trade channels.
- DFI Retail guided for underlying PATMI of US$180m-220m for FY24F, below our/Bloomberg consensus’ US$255m/US$246m.
New CEO, new strategic framework
- Read more at SGinvestors.io.
