The Covid-19 outbreak has resulted in strong supermarket and hypermarket performance in Southeast Asia. With more people staying at home, demand for groceries has risen as household’s increase their consumption of home-cooked meals, resulting in strong Same Store Sales Growth. Ongoing transformation plans have moreover improved efficiency in supermarket and hypermarket operations, promising sustained strong performance in this business arm.
SINGAPORE (Apr 29): Despite an 18-19% cut in FY20-21 earnings owing to poorer health and beauty, as well as convenience store earnings, DBS Group Research has maintained its “buy” rating on Dairy Farm (DFI) based on promising valuations in light of ongoing transformation of its Southeast Asian supermarket business.
“DFI remains a multi-bagger re-rating play on its transformation strategy. Earnings may be derailed by the COVID-19 outbreak in the current quarter, but positives in the transformation process continue to come through in key areas such as South East Asia supermarkets showing improving operational efficiency,” reported analysts Alfie Yeo and Andy Sim on Thursday.
