DBS Group Research analyst Alfie Yeo continues to like Dairy Farm International (DFI) as he believes the group’s transformation towards an earning growth track is “well underway”.

“Some initiatives are already in place, enhancing earnings quality post-Covid,” he writes in a May 27 research note. He projects DFI will achieve earnings per share (EPS) CAGR of 30% over FY2020 ended December to FY2022.

Among the initiatives include plans by its 89%-owned Indonesian subsidiary Hero to phase out the Giant brand in Indonesia. Up to five Giant stores will be converted to the IKEA brand, with other Giant stores are to close by July. “As Hero’s Giant grocery retail business has been loss-making, culling back on exposure to this segment would reduce the earnings drag on our earnings forecast,” Yeo notes. 

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