Journey to Wealth
Dutch Lady Milk - 1H12 results in line
Period 2Q12/1H12
Actual vs. Expectations
The 1H12 net profit (NP) of RM57.5m was in line with our expectations, making up 50.8% of our estimate of RM113.5m.
Dividends No dividend was announced during the quarter.
Key Result Highlights
YoY, the 1H12 revenue improved 8.6% due mainly to better sales of its powder and liquid products. The PBT also rose 7.9% in tandem, mainly due to the higher sales above and helped also by a better sales mix, with the company having ceased its lower-margin condensed milk production in September 2011. The NP increased marginally by 2.4% YoY due to a higher tax bracket of 26.1% (vs. 25.8% in 1H11).
On a QoQ basis, the revenue was up by 1.6% on the back of higher sales from liquid milk products, particularly Ultra-high-temperature milk. Due to a 1.0ppt NP margin expansion, its NP improved 9.2% QoQ, boosted by a slightly lower cost of sales.
Outlook Note that this year's results were without the contribution from its condensed milk production, and despite this, the company was still able to register a single-digit NP growth of 2.4% (YoY).
Thus, we remain positive on the company's prospect going ahead given its strong brand and market position.
Change to Forecasts
We are maintaining our FY12-13E NP estimates of RM113.5m-RM119.9m.
Rating Maintain MARKET PERFORM
Valuation We have revised our TP on DLady upwards to RM44.60 (from RM35.60 previously) based on a higher PER of 23.9x (19.0x previously) over FY13 EPS of 186.6sen (see overleaf for details).
Risks A global economic uncertainty may impact consumers spending, which will in turn hit the company's earnings.
Source: Kenanga
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
