Broker: UOB Kay Hian
Date of Report: 14 April 2026
Excerpt from UOB Kay Hian report.
Report Summary
- Stock: Delfi (DELFI SP)
- Action: BUY (Maintained)
- Target Price: S\$1.68 (Raised by 50% from previous S\$1.12)
- Key Idea: Delfi is entering an earnings recovery cycle with a strong margin recovery expected as cocoa prices have fallen over 60% from 2024-25 peaks. This significantly eases input cost pressures that hurt margins in 2025.
- Highlights:
- Margin recovery is expected from 2026-27 due to lower cocoa prices, despite some lag from hedging and forex headwinds.
- Delfi’s focus on higher-margin Own Brands (e.g., SilverQueen, Cha Cha) and its dominant market share in Indonesia position it well for upside as costs ease.
- The stock currently trades at a discount (~18x 2027F PE) to global peers, with considerable upside potential (+41.2%).
- Key catalysts include better-than-expected margins, rupiah strengthening, and successful premiumisation or product diversification.
- Implication: Investors are advised to BUY Delfi for potential margin and earnings recovery, as well as attractive upside following the dramatic drop in cocoa prices.
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