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$1.25 a good level?
Elf2000 ( Date: 28-Jun-2023 12:09) Posted:
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UOB Kay Hian maintains " buy" call on FTSE ST All-share leading performer Delfi
UOB Kay Hian analysts John Cheong and Heidi Mo have kept their " buy" call and $1.71 target price on Delfi, given how the chocolate maker continues to enjoy robust demand across Indonesia and other markets.
Year to date, Delfi is among the strongest performing stocks within the FTSE ST All-Share Index, which consists of the 30 STI component stocks, plus another 72 mid and small cap counters. It has gained 65.38% year to date as of close of June 30. Sembcorp Industries U96 -0.35% , which leads both this index and the STI, is up 67.15% following a strong 3.79% gain on June 30.
The company, having reported record-high revenue of US$160.8 million for its 1QFY2023, up 20.8% y-o-y, is seen to maintain its growth momentum for the full year.
The growth was driven by strong double-digit sales growth from its two key business lines, products sold under Delfi' s own brands, and those it makes for others, which were up 17.6% and 26.7% yoy respectively.
Cheong and Mo expect growth in Indonesia, Delfi' s key market, to continue strongly, given how the country' s GDP is seen to increase by 5% this year.
The analysts note that price of cocoa - Delfi' s key ingredient - has recently surged because of limited supply. Yet, they are confident that forward contracts entered by the company, plus its strong pricing power, should help alleviate such concerns.
Despite the higher costs, Delfi' s gross margins increased 5ppt y-o-y in 2016 and remained stable above 28% since.
The analysts attribute this to Delfi' s implementation of successful strategies, such as product resizing.
" Additionally, Delfi actively manages cost with forward hedges of up to 18 months, helping the group secure its raw material requirements while locking in purchase prices," they add.
Cheong and Mo note that Delfi has maintained a consistent dividend payout ratio of 50% for years and is expected to give a yield of 5% this year.
" Given its strong net cash position of US$73.1m, we expect payout ratio to be maintained at least 50% in 2023-25," the analysts state.
Delfi is now trading at 12x 2023F PE, a 40% discount to Indonesia-based peers&rsquo 2023 estimated PE average of 21x.
Their target price of $1.71 is based on 17x estimated FY2023 earnings, which is its long-term mean.
Wait for next few days for it to digest those
stuck at higher prices and higher volume.
Short term gainers pbbly wl unload end of
day to book profit and wait for next wk
stuck at higher prices and higher volume.
Short term gainers pbbly wl unload end of
day to book profit and wait for next wk
COMPANY UPDATE
Delfi (DELFI SP)
Expect Robust Growth Momentum For 2023, Backed By Market-Leading Position
Friday, 30 June 2023
BUY
(Maintained)
Share Price Target Price Upside
COMPANY DESCRIPTION
S$1.29 S$1.71 +32.6%
Delfi continues to enjoy robust demand across Indonesia and other markets, evidenced
by its record-high revenue recorded in 1Q23. This growth momentum is expected to
continue for 2023, as seen from the 74% yoy increase in inventory levels. While cocoa
prices rally amid the limited supply, Delfi&rsquo s stable performance in the previous El Nino
event helped by forward contracts and strong pricing power should alleviate concerns
over rising costs. Maintain BUY and target price of S$1.71.
WHAT&rsquo S NEW
&bull
Delfi manufactures, markets and distributes chocolate confectionery products. The company offers a broad range of chocolate and sugar confectionery products such as moulded chocolates, dragees, enrobed wafers, and biscuits. and increasingly more healthy snacks.
High consumer demand across operating markets to remain. Delfi Limited (Delfi)
continues to face elevated demand for its products, having registered a record-high quarterly
revenue of US$160.8m (+20.8% yoy, +29.0% qoq) in 1Q23. This was driven by the strong
double-digit sales growth in its two business lines, Own Brands and Agency Brands, of
17.6% and 26.7% yoy respectively. Strong growth in Indonesia and regional markets was
also observed, at 19.2% yoy (+38.0% qoq) and 24.5% yoy (+12.5% qoq) respectively. We
expect demand to remain robust from Indonesia, its key market, where revenue recorded a
19.2% yoy (+38.0% qoq) growth. According to OECD Economic Outlook in Jun 23,
Indonesia&rsquo s GDP is expected to grow by approximately 5% in 2023 and strengthen slightly in
2024 as a result of strong commodity prices and public investment. As for its regional
markets, Delfi continues to strengthen its distribution capabilities by expanding its product
portfolio. On top of this, management reported high inventory levels of US$101.8m (+73.5%
yoy) in 1Q23, signalling confidence in continued sales momentum moving forward.
STOCK DATA
GICS sector
Bloomberg ticker:
Shares issued (m):
Market cap (S$m):
Market cap (US$m):
Consumer Staples DELFI SP 611.2 788.4 583.3 0.9
S$1.44/S$0.679
3-mth avg daily t' over (US$m):
Price Performance (%)
52-week high/low
Expect limited impact from higher cocoa prices and El Nino weather event. The price
of Delfi&rsquo s key ingredient cocoa has rallied recently, trading at around US$3,128/tonne (+4.1%
mom) as of date. This is likely due to a larger-than-expected supply deficit for the 2022/23
season forecast, partially from firming demand for cocoa per the International Cocoa
Organisation&rsquo s May 23 report. Further driving prices upward is the return of El Nino, the
warm phase of the El Nino-Southern Oscillation which brings about poor climate conditions
for growing cocoa and therefore raises concerns over cocoa supply. The last El Nino event
from 2014-16 caused a drought that severely affected global cocoa production, leading to
soaring cocoa prices. While higher costs may be incurred, it is worth noting that gross
margins increased 5ppt yoy in 2016 and remained stable above 28% since. This is
attributable to management&rsquo s implementation of successful strategies, such as product
resizing. Additionally, Delfi actively manages cost with forward hedges of up to 18 months,
helping the group secure its raw material requirements while locking in purchase prices.
Delfi (DELFI SP)
Expect Robust Growth Momentum For 2023, Backed By Market-Leading Position
Friday, 30 June 2023
BUY
(Maintained)
Share Price Target Price Upside
COMPANY DESCRIPTION
S$1.29 S$1.71 +32.6%
Delfi continues to enjoy robust demand across Indonesia and other markets, evidenced
by its record-high revenue recorded in 1Q23. This growth momentum is expected to
continue for 2023, as seen from the 74% yoy increase in inventory levels. While cocoa
prices rally amid the limited supply, Delfi&rsquo s stable performance in the previous El Nino
event helped by forward contracts and strong pricing power should alleviate concerns
over rising costs. Maintain BUY and target price of S$1.71.
WHAT&rsquo S NEW
&bull
Delfi manufactures, markets and distributes chocolate confectionery products. The company offers a broad range of chocolate and sugar confectionery products such as moulded chocolates, dragees, enrobed wafers, and biscuits. and increasingly more healthy snacks.
High consumer demand across operating markets to remain. Delfi Limited (Delfi)
continues to face elevated demand for its products, having registered a record-high quarterly
revenue of US$160.8m (+20.8% yoy, +29.0% qoq) in 1Q23. This was driven by the strong
double-digit sales growth in its two business lines, Own Brands and Agency Brands, of
17.6% and 26.7% yoy respectively. Strong growth in Indonesia and regional markets was
also observed, at 19.2% yoy (+38.0% qoq) and 24.5% yoy (+12.5% qoq) respectively. We
expect demand to remain robust from Indonesia, its key market, where revenue recorded a
19.2% yoy (+38.0% qoq) growth. According to OECD Economic Outlook in Jun 23,
Indonesia&rsquo s GDP is expected to grow by approximately 5% in 2023 and strengthen slightly in
2024 as a result of strong commodity prices and public investment. As for its regional
markets, Delfi continues to strengthen its distribution capabilities by expanding its product
portfolio. On top of this, management reported high inventory levels of US$101.8m (+73.5%
yoy) in 1Q23, signalling confidence in continued sales momentum moving forward.
STOCK DATA
GICS sector
Bloomberg ticker:
Shares issued (m):
Market cap (S$m):
Market cap (US$m):
Consumer Staples DELFI SP 611.2 788.4 583.3 0.9
S$1.44/S$0.679
3-mth avg daily t' over (US$m):
Price Performance (%)
52-week high/low
Expect limited impact from higher cocoa prices and El Nino weather event. The price
of Delfi&rsquo s key ingredient cocoa has rallied recently, trading at around US$3,128/tonne (+4.1%
mom) as of date. This is likely due to a larger-than-expected supply deficit for the 2022/23
season forecast, partially from firming demand for cocoa per the International Cocoa
Organisation&rsquo s May 23 report. Further driving prices upward is the return of El Nino, the
warm phase of the El Nino-Southern Oscillation which brings about poor climate conditions
for growing cocoa and therefore raises concerns over cocoa supply. The last El Nino event
from 2014-16 caused a drought that severely affected global cocoa production, leading to
soaring cocoa prices. While higher costs may be incurred, it is worth noting that gross
margins increased 5ppt yoy in 2016 and remained stable above 28% since. This is
attributable to management&rsquo s implementation of successful strategies, such as product
resizing. Additionally, Delfi actively manages cost with forward hedges of up to 18 months,
helping the group secure its raw material requirements while locking in purchase prices.
seems like got chance to buy bk again...
Those stuck 1.3 and higher wl be forced to cut loss
if can' t pick up
Those stuck 1.3 and higher wl be forced to cut loss
if can' t pick up
msksmsks ( Date: 28-Jun-2023 10:11) Posted:
|
1.28 now, wait for 1.26?
Elf2000 ( Date: 28-Jun-2023 12:09) Posted:
|
Smart.
Congratsz
Tmr holiday......good to take some $$$
Congratsz
Tmr holiday......good to take some $$$
Elf2000 ( Date: 28-Jun-2023 12:09) Posted:
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Took profit and waiting to re-enter again😏
msksmsks ( Date: 28-Jun-2023 10:11) Posted:
|
Back to 1.27 - 1.25 again. ?
For round 3.
For round 3.
Profit taking. ?
Game over ?
Next change ?
Game over ?
Next change ?
msksmsks ( Date: 26-Jun-2023 18:08) Posted:
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Kgi called for trading Buy
Entry: 1.25, Target 1.35
Cut: 1.2
LOL
Entry: 1.25, Target 1.35
Cut: 1.2
LOL
Is time to take profit again?
Got chance, about time to break 145 soon.
Let them push.
Looking fwd this time.
msksmsks ( Date: 19-Jun-2023 11:09) Posted:
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Good $1.30 again!
Go up again🙃
Signs of resilience.
May turn up soon
May turn up soon
Let them do the unfinished job if it
Meant to push down further @1.2
For 2nd round ....
Meant to push down further @1.2
For 2nd round ....
Not bad...in out in out...kopi money.
Big bazzoka never touch.
Can sleep better here....no AI.
Can't hold its gains and losing steam
Is it wanna push down 1.20 again ?
Round 2 for the BB
Is it wanna push down 1.20 again ?
Round 2 for the BB