DKSH hit limit up on Friday after the management had a call with the investment community.

DKSH's latest results was good but there were a couple of things that were mentioned in the call which were not mentioned by the analysts of the investment banks simply because it would dampen the positive momentum and also make their extremely bullish view look not so good. 

Here are some of the things mentioned during the call which was not mentioned in any reports:

1. The third quarter of 2021 will be a very quiet quarter because there are no major festivals and the full lockdown starting in June will also affect numbers. Numbers for 1Q21 was very good because of CNY festival while 2Q21 was also good because of Hari Raya festival.

2. 2Q21 numbers was high also because of a one-off large pharmaceutical tender which DKSH executed. 

3. DKSH is the sole distributor of the Cansino vaccine but as with all pharmaceutical jobs, margins are very low and much lower than the other consumer goods. Distribution of Cansino vaccine is a very difficult job and this will make profit contribution to DKSH very insignificant.

4. Cash flow in the first half of 2021 was very strong because they have been able to reduce inventory and receivables but this cash flow is very unlikely to repeat in the second half of 2021.

Based on these takeaways which were not disclosed in any reports, I would suggest taking profit when DKSH goes towards RM5 as share price will likely correct when results for 3Q21 is released in November.