Retail Market Monitor: In-Depth Analysis of Key Singapore Stocks (12 March 2025)
Provided by UOB Kay Hian
DFI Retail Group Holdings (DFI SP): Strong Return To Growth With More To Come This Year
3 DFI reported stronger-than-expected results with underlying net profit up 30% year-on-year to US$201 million, although the bottom line was impacted by impairments and losses related to the sale of Yonghui in China. The company’s convenience and health & beauty (H&B) segments continue to do well. The company guided a 14-34% earnings growth in 2025 with perhaps the monetisation of its yuu and media platforms potentially providing a boost to its profits over the next 12 months. The analyst maintains a BUY rating with a higher target price of US$2.80.
Key highlights:
Solid execution, with strong performance from the convenience, H&B, and food divisions, as well as a reduction of losses from Yonghui.
Positioned for growth in 2025, with the company guiding for 2% revenue growth and an underlying profit of US$230 million to US$270 million, implying 14-34% year-on-year earnings growth.
The growth is expected to come from the H&B and convenience segments, as well as optimizing the product mix to improve margins. The company also plans to monetize the data from its yuu platform and advertising opportunities within its supermarkets.
The bottom line was impacted by impairments and non-cash items, including impairment on its interest in Robinsons Retail, impairment of goodwill in its Macau and Cambodia food businesses, and losses related to the divestment of Yonghui.
The company has strengthened its balance sheet, with net debt reduced by 25% to US$468 million as of the end of 2024, and is now in a net cash position after the completion of the sale of Yonghui.
The analyst maintains a BUY rating with a slightly higher target price of US$2.80, highlighting that DFI’s 2025 forward P/E of 12.2x is a 39% discount to its regional peers but still delivers a higher prospective yield of 4.9%.
Oversea-Chinese Banking Corp (OCBC SP) and DBS Group Holdings (DBS SP): Potential Downside Ahead
2 The technical analysis suggests that both OCBC and DBS could face potential downside in the near term.
Oversea-Chinese Banking Corp (OCBC SP):
Price broke and closed below the cloud, turning the chart outlook bearish. There is a bearish conversion and base lines crossover, and the MACD has turned bearish, which could increase the chances of the stock price moving lower.
The potential downside target is S$15.71, with a stop-loss at S$17.17.
The analyst’s institutional research has a fundamental BUY and target price of S$21.00.
DBS Group Holdings (DBS SP):
Price could have formed a price top at S$46.85. There is a bearish conversion and base lines crossover that hints at potential downside ahead, and the MACD is moving down, which could increase the chances of the stock price moving lower.
The potential downside target is S$42.09, with a stop-loss at S$46.63.
The analyst’s institutional research has a fundamental HOLD and target price of S$49.80.
Regional Morning Notes
Delfi continues to enjoy robust demand across Indonesia and other markets
3 Delfi, a Singapore-based company, continues to enjoy robust demand across Indonesia and other markets, as evidenced by its record-high revenue recorded in the first quarter of 2023.
