PETALING JAYA: DKSH Holdings (M) Bhd
is expected to post weaker performance in the coming quarter before rebounding in the fourth quarter (4Q).
However, consumer sentiment is expected to remain positive, buoyed by the government’s income boosting measures such as the Employees Provident Fund Flexible Account 3 and civil servants pay hike, said Hong Leong Investment Bank (HLIB) Research.
Post its annual report updates, HLIB Research’s financial year 2024/25 (FY24/25) forecasts for DKSH were adjusted downward by 3.2% and 1.9%, respectively.
It also reduced its target price (TP) to RM6.03 a share from RM6.14 previously. Its TP is derived based on a price earnings ratio multiple of 6.7 times on its FY24 earnings per share of 89.9 sen.
It maintained its “buy” call as it continued to like the company for its diverse product portfolio encompassing both premium and affordable products.
It said on a quarter-on-quarter basis, revenue declined by 9.9% to RM1.9bil, dragged by the consumer goods (down 10.4%) and healthcare (down 9.6%) segments.
The decline can be attributed to the high base effect, as Ramadhan fell in end-March, which resulted in higher festive sales in 1Q as consumers made their purchases earlier.
Additionally, healthcare was affected by the changes in sales mix, coupled with timing of tenders won.
Sales was marginally up by 2.3% driven by strong growth from new and existing clients in both consumer goods and healthcare segments coupled with higher outlet sales for the others segment on a year-on-year (y-o-y) basis.
Improved showing of the healthcare segment (3.4% y-o-y) was underpinned by stronger growth from its existing clients.
