Investor on the Street

DLADY (3026): Going to Holland?

Publish date: Sun, 12 Nov 2023, 03:09 PM

DLADY (3026) is an Main Market company in the Consumer Goods segment. DLADY manufactures & sells dairy products, especially milk. 

DLADY's share price plunged from a peak around RM60+ in year 2018 to RM22.58 now.

Is DLADY selling at cheap price now?

1. Share price you pay is higher than Price to Book.

DLADY's share price is RM 22.58, whilst its net assets is about RM 6.46.

2. Best revenue in FY2022, Best Net Profit in FY2021.

But FY2021 was one-off, which means actual all-time high should be FY2016 with RM 149.1mil. Share price all-time high was May 2018 around RM 69.90. Share price could have further upside. 

3. Financial Statements.

DLADY usually has positive net cash from operations each quarter. DLADY is a net cash company without debts. DLADY pays regular dividends usually twice in a year.

4. Insider dealings.

Director Datin Seri Sunita Mei-Lin Rajakumar bought 1000 shares this year. Major shareholder EPF have been selling shares recently. Hard to gauge the thoughts of EPF. 

5. PE ratio is around 39.

DLADY's trailing PE ratio is quite high. 

I have DLADY shares. DLADY is still a well-managed company. DLADY is not "going to Holland". 

DLADY's new factory supports future demand & growth. Earnings may not cover amount of costs incurred in the short term, but current share price could have factored these in. 

Suppose DLADY produces an average net profit to shareholders of 113mil./year, given PE ratio of 20, DLADY should be worth around RM 35.30. 

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