Broker: CGS International
Date of Report: July 28, 2026
Excerpt from CGS International report.
Report Summary
Stock: DFI Retail Group (DFIR.SI)
Action: ADD (High Conviction Buy)
Target Price: US$5.50
Current Price: US$3.52
Upside: 56.3%
- Key Idea: DFI Retail Group reported strong 1H26 underlying net profit of US\$117m (+44% YoY ex-divestments), in line with estimates. The company raised its FY26 net profit guidance to US\$285m-305m (previously US\$270m-300m) and boosted its organic revenue growth outlook to 3-4% (from 2-3%).
- Highlights: Sales momentum was robust in Health & Beauty (+7% YoY), Convenience (+4%), and Home Furnishing (+4%). Margins improved at the group level but were softer than expected due to cost reallocation and reinvestment in price and promotions. Interim dividend was US 6.20cts/share, maintaining a 70% payout policy.
- Investment Thesis: The recent share price weakness (-10% YTD) is seen as overdone. DFI’s stronger-than-expected results and upgraded outlook reinforce the ADD (Buy) call. The company is identified as one of CGS International’s high conviction picks in Singapore.
- Key Catalysts: Potential portfolio actions (e.g., exit underperforming businesses), and acceleration of store expansion could drive further re-rating.
- Risks: Prolonged macroeconomic weakness and competitive pressures impacting margins are the main risks.
Key Action for Investors: ADD (Buy) DFI Retail Group for a potential upside to US$5.50, with strong earnings momentum and improved guidance supporting a re-rating.
Above is an excerpt from a report by CGS International. Clients of CGS International can access the full research report from the broker’s website: CGS International research website
