DFI Retail Group - RHB Invest 2024-06-06: Recovery On Track, Compelling Valuation; Keep BUY

• DFI Retail continues to remain as our recovery play as 1Q24’s interim performance and outlook tracks in line with our expectations. We anticipate continued earnings recovery in FY24F.
• DFI Retail's dividend yield is decent due to parent company Jardine Matheson (SGX:J36) practice of uplifting dividends back to the group level.
• - Read this at SGinvestors.io -

1Q24 within expectations.

• DFI Retail Group (SGX:D01)’s latest interim management statement revealed that 1Q24 continued to track within our expectations. Overall revenue grew 2% y-o-y while underlying profit grew more than 60% y-o-y on the back of better profitability.
  • - Read this at SGinvestors.io -
  • The convenience division’s SSSG increased in Macau, South China, and Singapore while margins more than doubled due to better sales mix.
  • The health and beauty division’s SSSG grew in Malaysia and Indonesia, and on tourism recovery in North Asia. Margins improved on cost control and better gross margins.
  • The home furnishing division saw lower underlying profit – affected by weak sentiment in Indonesia and Hong Kong outlets.
• Among DFI Retail's key associates, Maxim’s had flat profit growth, while Yonghui and Robinson’s Retail’s profits grew.

Estimates unchanged.

• Read more at SGinvestors.io.

Alfie Yeo RHB Securities Research | https://www.rhbgroup.com/ 2024-06-06 SGinvestors.io

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