Is there still hope for Dairy Farm?

Its squeezed valuations might eventually recover.

Dairy Farm’s share price has not performed well in recent months, with its unit price slipping 21% since early August. However, DBS analysts believe that there’s still hope for Dairy Farm’s under valued stock.

“We find value in DFI’s core business after stripping out the value of DFI’s 20% stake in Yonghui’s shares and net debt. Our analysis suggests that the current share price is now pricing DFI’s core business at 18x FY16F PE, a deep discount to peer and historical average PE multiple of 25x,” DBS said in a report.

Dairy Farm’s growth is supported by store expansion and better efficiencies, DBS said. Among the initiatives to support growth are more Mannings stores in Yonghui, more focus on private labels, e-commerce, fresh/ready to eat food, improvement in supply chain infrastructure and inventory management.

“We believe the company's share price correction is overdone for two broad reasons: 1) There is value in DFI’s core business. Barring unforeseen shocks, we do not see significant cuts in earnings despite the recent share price correction,” said the report.

Also Read

Food factory at 30 & 32 Tuas Avenue 12 up for sale for $19.0m

Singapore Polytechnic launches training facility for food manufacturing

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit