Broker Name: CGS International
Date of Report: June 2, 2025

DFI Retail Group Stock Surges: Uptrend Confirmed and Asset Monetisation Drives Bullish Outlook

Market Overview: U.S. Economic Backdrop and Implications for Retail

The U.S. labor market is showing signs of moderation, with hiring likely slowing in May as companies focus on cost containment amid shifting trade policies and guarded consumer sentiment. Economists expect payrolls to rise by 125,000, down from the three-month average of 162,000, while the unemployment rate is projected to hold at 4.2%. Businesses are re-evaluating investments and becoming increasingly cautious about revenue prospects, which has resulted in more conservative labor demand. Notably, auto sales are expected to decline for a second month, and job openings are forecasted to fall to 7.1 million—the lowest since 2020. These broader economic signals are shaping the retail landscape and influencing strategic decisions for leading groups like DFI Retail.

DFI Retail Group Holdings Ltd: Strategic Divestments and Bullish Stock Momentum

Key Recent Developments

– DFI Retail Group (DFI) has accelerated its asset monetisation strategy, divesting approximately US\$1.2 billion in major assets since 2024. – The most recent transaction involved selling its 22.2% stake in Robinsons Retail Holdings for US\$283 million, reflecting an implied valuation of 11.2x FY24 P/E—a figure considered fair for this sector. – Other significant divestments include PT Hero Indonesia, Yonghui Superstores, and Cold Storage Singapore.

Valuation and Recommendation

– The stock is rated Add, with a target price (TP) of S\$3.00. – The valuation is based on a 14.6x FY26 P/E, which is 0.5 standard deviations below the five-year average, indicating a conservative yet optimistic stance. – Potential catalysts for further upside include continued improvements in earnings and the possibility of a special dividend.

Technical Analysis: Uptrend Continuation Confirmed

Key Technical Highlights

• Last Price: S\$2.76
• Entry Prices: S\$2.76, S\$2.60, S\$2.45
• Support Levels: S\$2.61 (Support 1), S\$2.24 (Support 2)
• Stop Loss: S\$2.23
• Resistance Levels: S\$2.88 (Resistance 1), S\$3.05 (Resistance 2)
• Target Prices:
  • TP1: S\$3.08
  • TP2: S\$3.17
  • TP3: S\$3.30
  • TP4: S\$3.80

Technical Indicators

– DFI’s share price bottomed in August 2024 and has been on an upward trend since. – A bullish breakout from a flag formation confirms the continuation of the uptrend. – The price is trending above all Ichimoku indicators, underscoring strong momentum. – The MACD and signal line are rising, remaining above the zero line with a positive histogram, indicating bullish momentum. – The Stochastic Oscillator is climbing, supporting the positive price action. – The 23-period Rate of Change (ROC) has rebounded, and trading volume has surged above the 20-period average, reaffirming sustained bullish strength.

Company Profile: DFI Retail Group Holdings Ltd

DFI Retail Group Holdings Ltd is a diversified holding company specializing in the operation of retail stores across Asia. Its subsidiaries manage a broad portfolio of supermarkets, drugstores, and convenience stores, serving millions of customers throughout the region.

Analyst Coverage

– Lead Analyst: CHUA Wei Ren, CMT – Contact: weiren.chua@cgsi.com | +65 6210 8612

Asset Monetisation Strategy: Creating Value for Shareholders

DFI’s asset monetisation strategy is central to its current investment thesis:

• Monetised US\$1.2 billion in key assets since 2024.
• Significant deals include exits from PT Hero Indonesia, Yonghui Superstores, and the recent sale of Cold Storage Singapore.
• The latest sale of its stake in Robinsons Retail Holdings was executed at a fair value and aligns with the company’s approach to unlocking shareholder value.

These divestments provide DFI with greater flexibility to pursue growth initiatives, return capital to shareholders, or fund special dividends.

DFI Retail Group: Investment Thesis and Outlook

– The continuation of DFI’s uptrend is fully confirmed by both fundamental and technical factors. – Robust asset monetisation has strengthened the balance sheet, providing optionality for future expansion, reinvestment, or enhanced shareholder returns. – Technical indicators remain supportive, with multiple resistance levels offering potential profit-taking zones and strong support underpinning the current rally. – The “Add” recommendation signals confidence in DFI’s ability to outperform, with a projected total return exceeding 10% over the next 12 months.

Stock Rating and Recommendation Framework

The total expected return combines the percentage difference between the target price and the current price with the forward net dividend yields. Stock price targets are set with a 12-month investment horizon.

Regulatory Disclosures and Compliance

CGS International provides sector and country ratings, defining “Overweight,” “Neutral,” and “Underweight” stances to guide portfolio positioning relative to benchmarks. The report is distributed across multiple jurisdictions in accordance with local regulations, with strict controls to prevent conflicts of interest and ensure the independence of research views.

Key Takeaways for Investors

• DFI Retail Group’s ongoing asset monetisation and robust technical momentum confirm its uptrend and support a bullish outlook.
• The stock’s Add rating is underpinned by strong fundamentals, technical confirmation, and clear catalysts for further growth.
• Investors should closely watch for continued earnings improvement and potential special dividends as triggers for near-term upside.
• DFI’s diversified retail portfolio and Asia-wide presence make it a compelling core holding for those seeking exposure to the region’s evolving consumer landscape.