Broker: CGS International
Date of Report: July 28, 2026
Excerpt from CGS International report.

Report Summary

• Stock Focus: DFI Retail Group (DFIR.SI)
• Action: ADD (High Conviction)
• Target Price: US\$5.50 (56.3% upside from current price of US\$3.52)
• Most Important Idea:
  • DFI Retail Group delivered strong 1H26 underlying net profit of US\$117m, in line with expectations. Management raised FY26 net profit guidance to US\$285-305m (from US\$270-300m), showing confidence in execution and earnings resilience.
  • The group upgraded its FY26 organic revenue growth outlook to 3-4% (from 2-3%). Interim dividend maintained at 70% payout policy.
  • Key growth was driven by Health & Beauty (H&B) segment (+7% yoy), Convenience (+4%), and Home Furnishing (+4%). Margin improvement was softer than forecast due to cost reallocation and promotional investments, but overall operating margin improved 40bp yoy.
  • The recent share price decline (-10% YTD) is seen as overdone. The broker reiterates DFI as a high conviction Add, citing potential re-rating catalysts such as portfolio actions (e.g., exit from underperforming businesses) and store expansion.
  • Risks include macroeconomic weakness and competitive pressure on margins.

Implications for Investors:

• Actionable Add call with a specific target price of US\$5.50, reflecting significant upside potential.
• Supported by raised guidance, strong segment performance, and confidence in 2H execution.
• Monitor for portfolio changes and store expansion, as these are potential catalysts for a re-rating.
• Be cautious of downside risks from macro and competitive factors.

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.