PETALING JAYA: While some moderation is expected in the coming quarters for DKSH Holdings (M) Bhd
due to high base effects, the company remains well-positioned to benefit from improving consumer disposable income trend.
This outlook is supported by government initiatives such as the Employees’ Provident Fund’s Account 3 withdrawals, civil service wage hikes, and an increased minimum wage, all of which are likely to lift discretionary spending.
With a balanced portfolio spanning premium brands and essential consumer staples, DKSH offers resilient exposure across the spending spectrum, said HLIB Research.
The research house has updated its model to reflect the financial year 2024 (FY24) audited accounts and introduced forecasts for FY27.
It maintained a “buy” call on DKSH with a target price of RM6.95 a share, based on a price-to-earnings multiple of 6.7 times FY25 earnings.
Shares of DKSH closed 4.61% higher yesterday at RM5.22.
The research house continues to like DKSH for its diversified product portfolio, encompassing both premium and affordable products.
DKSH reported a strong start to 2025, with core net profit jumping 49% quarter-on-quarter and 20% year-on-year in the first quarter, on the back of festive-driven sales, margin expansion from own-branded products, and improved cost efficiencies.
Revenue grew across all divisions, underpinned by contributions from both existing and new clients, amounting to RM2.2bil for the period.
The results accounted for 36% of HLIB Research’s full-year forecast and 40% of consensus estimates.
The research house noted that all of DKSH’s segments recorded growth – consumer goods: plus 10%, healthcare: plus 6% and others: plus 0.3% – boosting overall revenue by 8%.
The consumer goods segment benefited from growth among existing and newly secured clients, coupled with seasonal sales from Hari Raya and Chinese New Year.
Meanwhile, the rise in DKSH’s healthcare business was driven by strong growth from existing and newly onboarded clients.
Core net profit was notably enhanced by higher margin contributions from own-branded products and improved cost efficiencies in distribution, lifting core net profit by 49% to RM58.6mil.
