Broker: CGS International
Date of Report: March 4, 2026

Excerpt from CGS International report.

• DFI Retail Group delivered FY25 underlying net profit of US\$270m (+35% YoY), with flat revenue but a notable 30bp operating margin improvement to 4.2% due to better product mix and cost controls in Health & Beauty and Home Furnishing.
• FY26F profit guidance is US\$270m-300m (13-25% organic growth), driven by further margin improvements (forecast 5.1% operating margin) from mix shifts and lower overheads, on track to meet medium-term margin targets.
• DFI is expanding omnichannel capabilities, with new digital and M&A initiatives, and leveraging data via its yuu loyalty program to boost income streams.
• Strong execution, higher earnings visibility, and a net cash position underpin a higher target price of US\$4.90 (20x FY27F P/E), with key catalysts including potential M&A and Hong Kong sales recovery.
• DFI is progressing on ESG, targeting to halve carbon emissions by 2030 and reach net zero by 2050, with dedicated investments and improved disclosures, though no ESG premium/discount is applied in valuation.
• Risks include slow recovery in Hong Kong and competitive pressures on margins; the stock carries an Add rating with a 14% upside to the target price.

Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgs-cimb.com