Highlights

PublicInvest Research

Author: PublicInvest   |   Latest post: Tue, 20 Oct 2020, 10:04 AM

 

DKSH Holdings (M) Berhad- Within Expectations

Author:   |    Publish date:


DKSH Holdings (M) Berhad (DKSH) reported a 1QFY20 net profit of RM10m, from a net loss of RM0.6m in 1QFY19, driven by the contribution from Auric Malaysia and the increase in consumer demand during the initial stages of the Movement Control Order (MCO). The 1QFY20 results were in-line our expectations, but were slightly below consensus’ forecasts, accounting for 23% and 20% of our full-year forecasts respectively. Moving forward, we believe that DKSH’s operating margins will continue to improve as the group continues to benefit from better cost control from its on-going growth and efficiency improvement project. While we maintain our TP for DKSH at RM2.65 based on 9x PER FY20 EPS, we downgrade our call from Outperform to Neutral as our valuation is suggesting a slight downside from current price.

  • 1QFY20 revenue grew by 10.3% YoY to RM1.72bn. Marketing & Distribution segment revenue increased by 14% on the back of the positive contribution from Auric Malaysia, new clients secured as well as the stronger sales recorded during the early stages of the MCO. Meanwhile, the Logistics segment revenue grew by 7.3% YoY due to the organic growth in both Healthcare and Telecommunications sales. On the other hand, the Other segment posted a 17.6% drop YoY as Famous Amos business operations were affected by the MCO. DKSH current operates a total of 101 Famous Amos outlets with 99 stores in Malaysia and 2 in Brunei.
  • 1QFY20 operating profit increased to RM27.9m. Marketing & Distribution segment managed to turnaround from a net loss of RM0.4m previously as DKSH is no longer incurring cost for its internal growth and efficiency project. The operating result for the Logistics segment grew by 16.8% YoY, likely supported by more favourable margin mix and better cost control from the growth and efficiency project. On the flip side, the Others segment net loss doubled to RM9.4m mainly due to unrealised derivatives loss recorded for interest rate swap and an increase in finance cost incurred for Auric’s acquisition.
  • Future outlook. We are anticipating subdued demand for consumer goods as consumer spending is likely to remain muted in the near term before normalising in 4QCY20 on the back of higher consumption ahead of festive seasons. Nonetheless, we believe that DKSH’s margins will continue to improve going forward as the group continues to reap the benefits from its on-going growth and efficiency improvement project, as reflected in the improvement in EBIT margins on a YoY basis (1QFY20: 1.6% vs 1QFY19: 0.5%)

Source: PublicInvest Research - 29 May 2020

Share this
Labels: DKSH

Related Stocks

Chart Stock Name Last Change Volume 
DKSH 2.98 0.00 (0.00%) 4,900 

  Be the first to like this.
 


APPS
I3 Messenger
Individual or Group chat with anyone on I3investor
MQ Trader
Perform Technical & Fundamental Analysis on Stocks
MQ Affiliate
Earn rewards by referring your friends
 
 

339  418  603  1071 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 LAMBO 0.0350.00 
 LUSTER 0.26+0.035 
 MAHSING 1.36+0.12 
 KTB 0.165+0.05 
 LUSTER-WA 0.165+0.035 
 XOX 0.1250.00 
 AT 0.095-0.005 
 MLAB 0.0350.00 
 PHB 0.03+0.01 
 SALCON-WB 0.15+0.02 

FEATURED POSTS

1. The Equity Market Index Benchmark in Malaysia CMS
2. Trading Scenarios of Derivatives Bursa Derivatives Education Series
3. Derivatives 101 Bursa Derivatives Education Series
4. Why Trade FKLI? Bursa Derivatives Education Series
5. MQ Trader - Introduction to MQ Trader Affiliate Program MQ Trader Announcement!

TOP ARTICLES

1. DON'T FORGET TO WATCH THIS EXPLOSYF COUNTER CLOSELY !!! Bursa Master
2. IT'S A TIME FOR THIS GLOVES GOING TO SKYROCKET!!! Follow Kim's Stockwatch!
3. A ZOOM Meeting With My Uncle (Retired Fund Manager) Learn from my Uncle (Retired Fund Manager)
4. SUPERMAX - BEYOND GLOVES !!! freetospeak
5. PublicInvest Research Daily - 19 October 2020 PublicInvest Research
6. LET'S GET ROLLING THIS GLOVES TO NEXT LEVEL!!! Follow Kim's Stockwatch!
7. LUSTER - IS IT ANOTHER GLOVE TITAN? HIDDEN WINNER(S) OF PHARMACEUTICAL DEMAND PENT UP
8. Covid 19 cases in Malaysia - Koon Yew Yin Koon Yew Yin's Blog
PARTNERS & BROKERS