DFI Retail Group

(28-08-2012, 08:23 PM)Drizzt Wrote: no i mean purely from the margins perspective not who they sell to. the big contributors is hongkong and singapore. perhaps they can sell higher margins thats why.

I had not researched on Walmart and Dairy Farm, but i happen to know mart operation in China, with friend operating a small mart in China

It is contradicting that the margin is low for China mart operators? Base on my knowledge, mart biz is very profitable, both by the volume, and fee incurred to suppliers to sell their goods in mart.

I am always interested to retail store operator biz, but I had not able to decipher their valuation by Mr Market. Probably need to brush-up for my knowledge on their biz

well i don't study Dairy Farm in detail, but contrasting what is the biggest diff between dairy farm and walmart, i guess thats it.

(28-08-2012, 04:55 PM)Musicwhiz Wrote: Dairy Farm already has such high ROE, now that Carrefour is exiting, I guess it may climb even higher?

And the problem with the share price always rising - don't worry too much cos it's an excellent business, so hard to buy it cheap!

The dividend is quite low (1.8%). Is this a norm for such sector?

(31-08-2012, 02:48 PM)palantir Wrote:

(28-08-2012, 04:55 PM)Musicwhiz Wrote: Dairy Farm already has such high ROE, now that Carrefour is exiting, I guess it may climb even higher?

And the problem with the share price always rising - don't worry too much cos it's an excellent business, so hard to buy it cheap!

The dividend is quite low (1.8%). Is this a norm for such sector?

As shown in ShareInv.com, the commerce sector average Div yield is 2.1%. DairyFarm's P/E and P/B is high. Is this still a value stock?

(31-08-2012, 02:48 PM)palantir Wrote:

(28-08-2012, 04:55 PM)Musicwhiz Wrote: Dairy Farm already has such high ROE, now that Carrefour is exiting, I guess it may climb even higher?

And the problem with the share price always rising - don't worry too much cos it's an excellent business, so hard to buy it cheap!

The dividend is quite low (1.8%). Is this a norm for such sector?

With a PER of 29.03, the earning yield is ~3.4%. This means than if Dairy Farm do a 100% payout from its profit, 3.4% will be its highest possible dividend yield (not talking about FCF). At 1.8% dividend yield, this means that its payout ratio is already 50% which is not very shabby.

In any case, not many companies can afford to do a 100% payout ratio unless they have a very huge cash pile or that the business can no longer grow much. For Dairy Farm, with its high ROE of ~55%, ait makes much more sense for the company to reinvest the profit than to give them out as dividend.

Looking at s-chip trading at PER of 2, all that is needed of them is a 10% payout ratio and you have your 5% dividend yield. 20% payout ratio and its already 10% dividend yield. Paying out a 10% dividend yield then might not be a good justification that nothing will go wrong with them. Hence, one should not view the dividend yield as critically as compared to other more important financial ratio.

(not vested)

Imo dairy farm is a growth stock, else theres no way to justify the valuation. It has delivered for the last ten years, doesnt mean it will continue to though it should give some degree of confidence.

Some would say at these valuations its hard to justify entry, frankly i have to say i wouldnt call this a stock with a margin of safety either. That said i am still vested in this indirectly.

Latest news is that Giant will replace Carrefour as the hypermart in Suntec City, although not at the same location. Cold Storage is also opening in Suntec, a temporary shop. Good news for Dairy Farm shareholders, increase market share.

Kim Eng Research Report

<vested in both Suntec and Dairy Farm>

Has anyone held DF for past 10 years and re-invested all the dividends ?

According to another thread : http://www.valuebuddies.com/thread-2579-...l#pid37146 -

$10 K invest in DF has grown over 10 years to $240K . Really fantastic return .

At price to book of about 15, with an roe of 55%, the returns on YOUR equity (if you choose to invest in them) is about 3.6%. I really don't see the attractiveness here.

(03-12-2012, 12:25 AM)karlmarx Wrote: At price to book of about 15, with an roe of 55%, the returns on YOUR equity (if you choose to invest in them) is about 3.6%. I really don't see the attractiveness here.

The yield of your first year of investment is 3.6% is right

But the key selling point of dairy farm is on growth. Assuming the ROE is continue to grow at 55%, the yield will cross 10% on your 4th year of investment, and it is growing...

sound attractive now...