$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by Public
Outperform – TP RM5.85

“Best Quarter To-Date"

DKSH’s 1QFY24 net profit increased by 9.2% YoY to RM40.4m, primarily owing to better contributions from the Healthcare segment, on strong growth from existing and new clients. Results were above our and consensus estimates, accounting for 35% and 32% respectively. The discrepancy in our forecast was mainly due to lower-than-expected logistic costs. We raise our forecast for FY24-26F by an average of 7%, as we raise our profit margin assumptions on lower operating cost from the consumer goods segment. We foresee DKSH to post a 10.6% earnings growth in FY24F, underpinned by its well-diversified portfolio that could cushion earnings from down trading activities. Moreover, we expect a potential boost in consumer spending thanks to the introduction of EPF Account 3. We upgrade our call on DKSH from Neutral to Outperform, with a higher TP of RM5.85, based on 7x FY25F EPS.

Analyst:
Wong Ling Ling
wong.lingling@publicinvestbank.com.my