Dksh Holdings (Malaysia) Berhad

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research Report by HLIB

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by PBIV

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by HLIB

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by HLIB
BUY – TP RM6.03

"Strong healthcare momentum”

Overall in 1H24 Consumer Goods performance was flat YoY, while Healthcare and Others segment registered growth. Despite softened demand for some international brands due to the “boycott sentiment” following the conflict in the Middle East, DKSH observed a strong pick up in local products. Healthcare momentum continues to be strong, with the on-boarding of six new clients in 2Q24 and management reiterates its confidence that this segment will perform well for the remainder of the year. As of end of 2Q24, Famous Amos had a total of 94 outlets and management attributes the increase in sales to the constant refresh of its store portfolio to secure the most strategic locations. Forecasts are unchanged, TP is maintained at RM6.03, derived using a P/E multiple of 6.7x (at +1.5SD of DKSH’s 5-year average) on its FY24f EPS. Maintain BUY.

Analyst:
Syifaa’ Mahsuri Ismail
syifaa@hlib.hongleong.com.my

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

"Broadly In-line with Expectations”

DKSH’s 2QFY24 net profit increased by 12.3% YoY to RM26.7m, primarily driven by an improvement in operating profit margins from both Consumer Goods and Healthcare segment, likely due to better economies of scale Cumulative 1HFY24 net profit of RM67.2m was broadly in-line with our and consensus estimates, accounting for 55% full-year forecasts. We are still optimistic on DKSH’s earnings prospects going forward, as we expect DKSH to benefit from the potential boost in consumer spending post EPF Account 3 withdrawals and upcoming salary revision among civil servants. Our Outperform call and TP of RM5.85 based on 7x FY25F EPS is maintained.

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

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by HLIB
BUY– TP RM6.03

"Commendable YoY performance”

DKSH’s 2Q24 core net profit of RM31.7m (-35.1% QoQ, +8.9% YoY) brought 1H24’s sum to RM80.6m (+14.8% YoY). Although the results accounted for 67% of ours and 66% of consensus projections, we still deem the performance within expectations as we expect weaker 2H considering that most major festive seasons like Chinese New Year and Hari Raya occurred in 1H. Overall Consumer Goods segment remain resilient, while Healthcare benefitted from acquisition of new clients and growth for existing clients. Post-annual report updates, our FY24/25 forecasts are adjusted downward by -3.2%/-1.9%. We introduce FY26 figures. After earnings adjustment, our TP reduced to RM6.03 (from RM6.14 previously) based on unchanged of 6.7x P/E multiple (at +1.5SD of DKSH’s 5-year average) on its FY24f EPS

Analyst:
Syifaa’ Mahsuri Ismail
syifaa@hlib.hongleong.com.my

Change in Principal Officer - MR SENTHILATHIBAN A/L THIRUNILAKANTAN

Change in Boardroom - MR OH SAE UNG

Change in Boardroom - MISS JACLYN ANG SWEE YIN

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - MR STEPHEN JOHN FERRABY

General Meetings: Outcome of Meeting

$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

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

WINDING UP / RECEIVER & MANAGER / RESTRAINING ORDER / SPECIAL ADMINISTRATORDKSH HOLDINGS (MALAYSIA) BERHAD (199101021067 (231378-A))
- DISSOLUTION OF A WHOLLY-OWNED DORMANT SUBSIDIARY

Annual Report & CG Report - 2023

Circular to Shareholders in relation to the Proposed Renewal of Shareholders' Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature.

General Meetings: Notice of Meeting

DKSH - Notice of Book Closure

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RECURRENT RELATED PARTY TRANSACTIONSProposed Renewal of Shareholders' Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature ("the Proposal")

Final Dividend

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by HLIB
Buy (Maintain) – TP of RM6.14

“Delivering a stellar close”

DKSH’s 4QFY23 core net profit of RM39m (+29.7% QoQ, +4.0% YoY) brought FY23 full year sum to RM139.3 (+13.8% YoY). Its performance came in above both our (115%) and consensus (124%) estimates. Key discrepancy to our forecast was due to lower-than-expected tax expenses. The strong results achieved in FY23 was driven by improved contribution across all segments and better product mix that led to margin expansion. We raise FY24-25f forecasts by c.11% as we lower tax assumption. Maintain BUY with higher TP of RM6.14, derived based on a P/E multiple of 6.7x (at +1.5SD of DKSH’s 5-year average) on its FY24f EPS of 91.6 sen. We continue to like DKSH for its diverse product portfolio, encompassing both premium and affordable products, hence it stands to benefit even when down trading happens.

Analyst(s):
Sophie Chua Siu Li
sophiecsl@hlib.hongleong.com.my

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by PB
Neutral - TP of RM5.15

"Lifted by Healthcare Segment"

DKSH’s 4QFY23 net profit increased by 15.4% YoY to RM32.3m, driven by better contribution from the Healthcare segment. Full-year FY23 net profit of RM110.5m were above our but in-line with consensus estimates, accounting for 107% and 98% respectively. The discrepancy in our forecast was mainly due to the stronger-than-expected sales from both Consumer Goods and Healthcare segments. That said, we raise our earnings forecasts for FY24-25F by an average of 8%. Going forward, we remain cautious on DKSH’s near-term outlook, on weaker consumer confidence due to the rising cost of living expenditure. However, we foresee better profit margins as the group focuses on improving operational efficiency to mitigate the impact of softer consumer spending. Post earnings adjustment, our TP is raised to RM5.15, based on 7x FY24F EPS. Our Neutral call on DKSH is maintained.

Analyst(s):
Wong Ling Ling
wong.lingling@publicinvestbank.com.my

Quarterly rpt on consolidated results for the financial period ended 31/12/2023

@ricardomilos1021 yeah agreed. Since you have keep following HARISON, I would like to ask that Famous Amos in Singapore is owned by HARISON, while in Malaysia it is owned by $DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)?

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by HLIB
Buy (Maintain) – Target Price RM5.50

“Staying resilient”

Despite marginally lower topline in 3Q23, DKSH’s core net profit still showed improvement on a YoY basis, thanks to the better product mix. In order to continue improving its yield, DKSH has continued to sign on new clients in both its Consumer Goods and Healthcare segment, to strategically diversify its cost base. Weak ringgit is also not a major concern, as bulk of its purchases are done in ringgit, and it also manages its foreign currency exposure via hedging. Forecasts are unchanged, TP maintained at RM5.50, derived using a P/E multiple of 6.7x (at +1.5SD of DKSH’s 5-year average) on its FY24f EPS of 82.1 sen. While weak consumer sentiment may lead to uncertain purchasing patterns, we believe DKSH is well-insulated from this as its distribution portfolio covers both premium products and the more affordable consumer staples, hence it stands to benefit even when down trading happens. Keep BUY.

Analyst:
Sophie Chua Siu Li
sophiecsl@hlib.hongleong.com.my

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by Public Investment Bank
Neutral – Target Price RM4.78

“Within Expectations”

DKSH’s 3QFY23 net profit was down 1.7% YoY to RM17.4m, dragged by the weaker performance from the Consumer Goods segment and higher operating expense. Cumulative 9MFY23 net profit of RM78.2m was in-line with our and consensus estimates, accounting for 76% and 70% of our full-year forecast respectively. For the coming quarter, we expect a seasonal uptick in sales, driven by festive year-end spending. However, we believe the overall consumer spending to remain weak due to inflationary pressure. As such, we maintain our Neutral call on DKSH, with a lower TP of RM4.78, based on a lower PE multiple of 7x FY24F EPS, in-line with its average 5-year forward PE (see figure 1).

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

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)
Research by Hong Leong Investment Bank
Buy (From Hold) – Target Price RM5.50

“Lifted by lower finance and tax expense”

DKSH’s 3QFY23 core net profit of RM27.3m (-6.4% QoQ, +21.7% YoY) brought 9MFY23’s total to RM97.5m (+14.8% YoY). The results beat both our and consensus projections, accounting for 83% and 88% of full-year forecasts. Key discrepancy to our forecast was due to lower-than-expected finance costs and tax expenses. We revise our FY23-25f forecasts upwards by less than 3%, primarily to incorporate a lower finance cost assumption. Post earnings revision, our TP is raised to RM5.50 (from RM5.43 previously). Our TP is derived based on a P/E multiple of 6.7x (at +1.5SD of DKSH’s 5-year average) on its FY24f EPS of 82.1 sen. With the recent retracement in share price, our TP now reflects a comfortable upside of 20.4%. Consequently, we are upgrading our rating to BUY (from Hold previously).

Analyst:
Sophie Chua Siu Li
sophiecsl@hlib.hongleong.com.my

Quarterly rpt on consolidated results for the financial period ended 30/09/2023

Change in Boardroom - MR SANDEEP TEWARI