“While 1HFY2024’s results saw weaker-than-expected sales and joint venture (JV) and associates’ contribution, margin recovery of the food division was encouraging,” says Yeo.
Following 1HFY2024’s revenue miss as well as milder outlook on Hong Kong’s retail sales, RHB has lowered its revenue estimates by 5%-10%. However, Yeo has imputed higher operating margins and leverage on operating cost efficiencies, which results in RHB’s FY2025-FY2026 operating profit estimates remaining largely unchanged.
The analyst has also reduced his estimates for JV and associates’ income, following 1HFY2024’s disappointment. These have resulted in a FY2024-FY2026 recurring net profit cut of 6%-7%.
The stock currently trades at an attractive 10x FY2025 P/E and about 6% dividend yield, Yeo points out.
See also: UOBKH raises TP on SIA to $6.22, FY2026 earnings to see lift on fuel cost savings
As at 11.34am, shares in DFI are trading 6 US cents higher or 3.22% up at US$1.92.
