DFI Retail Group f.k.a. Dairy Farm Int'l *Official* (SGX: D01)

[pai000000]

Hi!

Dairy Farm International Holdings have been dropping slowly and steadily for the last few months. Does anyone know the reason?

I checked the news but cannot find anything out of the ordinary recently.
The last annual report talks about increasing competition in some regions, but that's about it.

I like the nature of the business, but not sure of the reason for the recent price weakness.

 

[winorlose]

their profit and revenue has been squeezed very hard by high rents and costs.

Till date, it is still valued very highly at P/E 24. Price/Book at 9!

Jardine owns 78% of it so not much liquidity

 

[felixleong]

Hi!

Dairy Farm International Holdings have been dropping slowly and steadily for the last few months. Does anyone know the reason?

I checked the news but cannot find anything out of the ordinary recently.
The last annual report talks about increasing competition in some regions, but that's about it.

I like the nature of the business, but not sure of the reason for the recent price weakness.

dairy farm has a lot of UK and european share holders

europe tat side now no good (last night their markets down 3-5%)

Jardine and friends are also dual listed in UK, so their stocks not so correlated to SG market

 

[felixleong]

also to add diary farm now doing quite a bit of restructuring and rebranding, if u notice now in SG less and lesser shop and save liao
all shop and save will close down or be renamed as Giant
this is part of their re-positioning exercise
so shareholders also quite worried if this is good for long term or not

cheers

 

[SpeedingBullet]

Vested, so here's the real reasons and a bear case for u:

Basically it's thanks to drop of emerging market currencies vs strong USD, of which they're heavily exposed (they report earnings, pay divvies and all in USD).

So in short, strong USD = weak regional currencies = squeezed margins. Simple.

Bull case:

They've started venturing into the Philippines and China.

 

[pai000000]

Hey winorlose and felixleong, thanks for the insight!

I think historically DFI has always traded at a high PE, 24 is considered rather low.
But if their business really get worse, the PE will rise back...

 

[pai000000]

Hey SpeedingBullet, thanks for sharing. Food for thought.

Vested, so here's the real reasons and a bear case for u:

Basically it's thanks to drop of emerging market currencies vs strong USD, of which they're heavily exposed (they report earnings, pay divvies and all in USD).

So in short, strong USD = weak regional currencies = squeezed margins. Simple.

Bull case:

They've started venturing into the Philippines and China.

 

[winorlose]

no problem, i myself looking at it for 1month already. The business might look good (food/pharmacies/convenience stalls) but it's high cost business and low profit margin stuff they sell.

i also dunno how to value it..since it's majority owned by conglomerates haha

 

[Erwinlow]

Broke the $9 barrier today...

 

[Erwinlow]

52week low now, keep dropping, is it still due to the strengthening of th USD?

 

[blurryanzi]

Dairy Farm has been experiencing slower growth since 2011. Topline grew 9,134m to 10,357m. Operating profit is pretty stagnant from 546m to 551m. I guess that is why share price has been falling. Mr Market is pricing in lower growth ahead for Dairy Farm.

On a comparison basis, both Sheng Siong and Dairy Farm are valued at 23x earnings.

 

[Shion]

Dairy Farm posts 2% growth in FY14 earnings to US$509 million | The Edge Markets

 

[felixleong]

Dairy Farm posts 2% growth in FY14 earnings to US$509 million

By Jo-Ann Huang / theedgemarkets.com | March 5, 2015 : 6:24 PM MYT
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SINGAPORE (Mar 5): Dairy Farm International, a member of the Jardine Matheson Group of companies, said revenues hit US$24.1 billion ($33 billion) for FY2014 ended December.

Sales from subsidiaries rose by 6% to reach US$11 billion, while sales from associates and joint ventures grew by 5% to reach US$13.1 billion.

Earnings attributable to shareholders grew by 2% to US$509 million. The company attributed the growth to a number of initiatives in China and the Philippines, as well as continuing to expand in the store network, supply chain infrastructure, IT systems and its employees.

At end of Dec, it has a net cash of US$475 million.

Net cash was reduced from the previous year due to higher investing activities, such as higher expenditure on stores and infrastructures, additional investment in Rustan Supercenters and the acquisition of 49% interest in Rose Pharmacy in the Philippines.

In FY14, it opened 124 new stores and acquired 238 retail outlets.

Dairy Farm is recommending a final dividend of 16.5 US cents a share, unchanged from last year, maintaining the total dividend of FY14 at 23 US cents a share.

Dairy Farm shares closed 5 cents higher at US$8.97 today.

 

[Erwinlow]

Anyone knows when is the ex-date? Probably gonna sell soon.

Edit: nvm found it, 18th March. Sgx website update a bit slow ah

 

[Erwinlow]

Rising steadily!

 

[Shion]

Target price raised by CIMB

Dairy Farm upgraded to "add", target raised to US$10.90 by CIMB | The Edge Markets

 

[luxcan]

Seems like Dairy Farm finally shoot up ~6.58

 

[BeHappyLo]

Bought today @US$7.50.

SBUX Singapore is now run by HK's Maxim caterers, a subsidiary of Dairy Farm International.
Maxim should be more aggressively pushing SBUX in the Mekong delta area and CAKE in the more matured markets like Macau, HK, Singapore and Malaysia. Ikea is also doing well.

But its supermarket and beauty stores are under aggressive competition.

Nonetheless, it is IMHO a good buy at this price.

 

[BeHappyLo]

shooting star today.

 

[Wood41]

Big Huat soon ?
I have it for about US$7.50 too.
Actually $0.30 gain is very little.