You have to anticipate reduce in the next QR profit. The sales from diesel smugglers have ceased.

In 2 years or 6 to 8 QRs..

That article is from TheEdge, analysis from CGS, not me. I’m just sharing because a lot of people here asking why PetDag falling..

Petronas Dagangan faces twin share de-rating threats — CGS
https://theedgemalaysia.com/node/710733

KUALA LUMPUR (May 8): Petronas Dagangan Bhd (KL:PETDAG) faces a threat from Saudi Aramco’s possible entry into Malaysia’s fuel retailing market, on top of the impending withdrawal of fuel subsidies, CGS International warned.

Aramco is reportedly negotiating to acquire Shell’s 950 retail fuel stations in Malaysia, which if a deal materialises, could heighten competition in the country, CGS said. Aramco will rebrand the stations and will offer promotions to retain existing customers and attract new ones, it said.

That “could be a potential de-rating catalyst” for Petronas Dagangan, CGS said. While Petronas Dagangan has more than 1,000 retail fuel stations in Malaysia, Shell’s 950 stations probably register higher sales due to first-mover advantage and multiple strategic locations in high-traffic areas, it said.

Reuters reported on Monday (May 6) that Aramco has been in talks with Shell since late 2023 for the deal that could be worth up to US$1 billion (RM4.74 billion).

In 2012, Petron Corp of the Philippines acquired ExxonMobil’s Esso stations in Malaysia and went on to expand its network from 550 stations to 770 stations at present day. Its Malaysian venture company Petron Malaysia Refining & Marketing Bhd also rebranded the stations, and launched multiple promotional campaigns with loyalty points and prizes, CGS noted.

The result was that Petronas Dagangan’s retail fuel sales fell 2% in 2014 and 9% in 2015, while incurring higher advertising and promotional costs in order to keep up with Petron, CGS said. “Aramco could pursue a similar strategy as Petron,” it cautioned and maintained its “reduce” call on Petronas Dagangan.

In the nearer term, Petronas Dagangan is expected to report a decline in core net profit in the first three months of its financial year 2024 (1QFY2024), from RM302 million in the same quarter a year earlier (1QFY2023), due to suspension of flights by MYAirline and high commercial operating profits a year earlier, according to CGS.

On a quarter-on-quarter basis, CGS forecasts an increase in core net profit in 1QFY2024, from RM184 million in the final quarter of 2023 (4QFY2023), as a result of inventory gains and “wide” margin from the sale of jet fuel.

Further out, Petronas Dagangan will have to contend with a “high likelihood” of lower total volume of fuel subsidies by the Malaysian government from mid-2024, CGS said.

“We think that higher pump prices could encourage carpooling and disincentivise the unlawful moving of subsidised fuel to foreign countries,” which may ultimately reduce Petronas Dagangan’s sales volume, the research house said.
Petronas Dagangan’s retail sales volume probably grew 3% in 2023 and will see “zero growth” in 2024-2025, once retail diesel prices are no longer subsidised at the pump, “which may turn out to be optimistic,” CGS added.

Two possible reasons why the price drop.
1. Net profit down 25% last QR
2. Possibility of Aramco (Saudi) entering the market via Shell acquisition. This will elevate market share competition with newcomer promotion, reward campaigns.

Welcome to the club.. hope your acting is good too..

PE TTM is 26.4 currently.

FFB is currently trading at PE 45

38 broken.. next resistance 45..

The CEO said with the new factory they aspire to be regional manufacturing hub. Currently exporting to Singapore and Brunei, they plan to add more countries. According to the CEO the parent company Royal FrieslandCampina has presence in 100 countries, so there are opportunities.

New factory 3 of the 8 production lines already in operation. The rest next month according to the CEO.

The new factory has double capacity from the old one. But we need to wait few QRs to see if the extra capacity is utilized. If it can be fully utilized, logically the revenue could be doubled..

Hopefully can break 38 today.
Next resistance 45..

Insiders disposing..

New factory will fully operate next month.

“Ramjeet said three lines were already fully operational at the new plant and the remaining ones would be commissioned next month.”

Dutch Lady RM540mil Factory Set To Begin Ops.
https://www.thestar.com.my/business/business-news/2024/05/31/dutch-lady-rm540mil-factory-set-to-begin-ops

Friday, 31 May 2024
SEREMBAN: Dutch Lady Milk Industries Bhd’s (DLMI) state-of-the-art RM540mil manufacturing facility here is set to be fully operational by July, says its managing director Ramjeet Kaur Virik.

The plant, located on a 13.2ha site at the Bandar Enstek halal hub and which is thrice the size of its present facility in Petaling Jaya, will also double the existing production capacity once it is fully commissioned.

“I am delighted to announce that we will be operational by this year after several years of hard work together with the relevant stakeholders to bring the project to fruition.

“DLMI@Enstek is our strong commitment to nation building and at the same time, rapidly embracing the latest food technologies on par with global best practises,” she said at the official opening of the facility by the Yang di-Pertuan Besar of Negri Sembilan Tuanku Muhriz Tuanku Munawir.

Its inauguration was also held in conjunction with World Milk Day, which falls on June 1.

DLMI, which is the country’s leading dairy company, started operations in Malaysia in 1963 following the opening of its plant in Petaling Jaya.

Ramjeet said three lines were already fully operational at the new plant and the remaining ones would be commissioned next month.

“The construction under phase one has been completed and most of our employees are already here, with the last batch moving in by next month.

“Once we have stabilised and all goes live, we will decommission the Petaling Jaya facility in the third quarter of this year,” she said, adding that the new manufacturing facility was integrated with Industry 4.0 technology to meet Malaysian and regional demand.

Ramjeet said although the new plant has doubled the capacity compared to the one in Petaling Jaya, there is sufficient land at DLMI@Enstek for future expansion.

“We also have extra land next to the current main building, so actually we can have four times the capacity we have in Petaling Jaya if there is higher demand in the future,” she said, adding that DLMI is the largest purchaser of local fresh milk, as it sources 55% of its supply from local farmers.

Ramjeet said DLMI’s significant investment in Negri Sembilan was its commitment towards building long-term public-private partnerships to help improve Malaysia’s dairy sector, particularly in raw milk production as well as to combat the triple burden of malnutrition in different segments of society.

Ramjeet said with new technologies and processes, DLIM @Enstek is poised to become Malaysia’s first smart-dairy factory with innovations from the lowest to the highest levels.

She said DLMI, which had been exporting its products to a few countries, may also look for new markets once it is able to increase production capacity.

“We belong to FrieslandCampina, which is operating in over 100 countries. And since we are part of its supply chain network, we hope to be able to export to more markets,” she added.

Ramjeet said DLMI@Enstek will also be open to the public where they will be able to learn more about the processes, animal welfare and the dairy industry.

Also present at the event were the Netherlands ambassador to Malaysia Jacques Werner and FrieslandCampina chief executive officer Jan Derck van Karnebeek.

FrieslandCampina is the main shareholder of DLMI.

Karnebeek in his speech said the group was proud of its investments in Malaysia and the new facility will enable DLMI to continue producing high-quality dairy products for Malaysians and the region.

He added that the Netherlands-based FrieslandCampina has consistently aided and supported local dairy farmers with the latest techniques and technology in collaboration with local authorities.

https://www.nst.com.my/amp/business/corporate/2024/05/1057193/dutch-lady-inaugurates-new-rm540mil-manufacturing-facility-bandar

BANDAR ENSTEK, Negri Sembilan: Dutch Lady Milk Industries Bhd (DLMI) has today inaugurated its new RM540 million state-of-the-art manufacturing hub here.

Deploying eight production lanes, the Halal manufacturing facility is integrated with Industry 4.0 technology to meet Malaysian and regional demand for the long-term.

DlMI said the new manufacturing hub with export capacity will introduce new skills relevant to the new generation of Malaysians to spur new opportunities for growth in terms of innovation, improved efficiencies and overall sustainability.

"We will be operational by this year, after several years of hard work together with relevant stakeholders to bring this project to fruition," DLMI managing director Ramjeet Kaur Virik said.


The Yang Di-Pertuan Besar of Negri Sembilan Tuanku Muhriz Tuanku Munawir officially inaugurated DLMI@Enstek.

Also present were the state's senior executive councillor Datuk Seri Jalaluddin Alias (representing Menteri Besar Datuk Seri Aminuddin Harun) and ambassador of the Netherlands to Malaysia Jacques Werner.

FrieslandCampina, the main shareholder in DLMI, was represented by chief executive officer Jan Derck van Karnebeek.

Ramjeet noted that this important milestone in the company's history is made possible by collaborating with the federal and state government.

They included agencies such as the Malaysian Investment Development Authority, Invest Negri Sembilan and Negri Sembilan Islamic Religious Affairs Department.

DLMI said the significant investment is a strong commitment towards building long-term public-private partnerships to help improve Malaysia's dairy sector particularly in raw milk production as well as combat the triple burden of malnutrition in different segments of society.

As part of FrieslandCampina in the Netherlands, Ramjeet emphasised that the DLMI@Enstek will be a critical hub in FrieslandCampina's global supply chain network and concurrently demonstrate the company's confidence in Malaysia's present and future economic opportunities.

"DLMI@Enstek is our strong commitment to nation-building and at the same time, rapidly embracing the latest food technologies on par with global best practices," she added.

The facility is also expected to increase Negri Sembilan's competitiveness as a magnet for new investments and further help create new spin-off economic benefits to the local economy.

The company's strong Dutch dairy expertise link further cements its leadership role in the country.

Van Karnebeek said the facility will enable DLMI to continue producing high-quality dairy products for Malaysians and the region.

He added that FrieslandCampina has consistently aided and supported Malaysian dairy farmers with the latest techniques and technology in cooperation with the government.

"Our dairy heritage and know-how continues to support Malaysian dairy farmers in learning new methods to help improve the quality and quantity of local raw milk production and contribute to the food security of Malaysia," he said.

The inauguration of DLMI@Enstek was held in conjunction with World Milk Day which falls on June 1, with this year's focus being on celebrating the goodness of dairy in providing better nutrition such as protein and calcium for the world


https://www.nst.com.my/amp/business/corporate/2024/05/1057193/dutch-lady-inaugurates-new-rm540mil-manufacturing-facility-bandar

If it can break 38, next resistance is 45..

Dutch Lady's 1Q net profit more than triples amid lower dairy raw materials costs, pays 25 sen dividend.
https://theedgemalaysia.com/node/713171

KUALA LUMPUR (May 27): Dutch Lady Milk Industries Bhd (KL:DLADY) said its first quarter net profit more than tripled from a year earlier on higher operating profit on the back of higher revenue and lower dairy raw material costs.

Net profit for the three months ended March 31, 2024 (1QFY2024) was RM26.66 million compared with RM8.52 million over the same period last year, the group said in an exchange filing. Earnings per share rose to 41.7 sen from 13.3 sen.

Dutch Lady said operating profit reached RM36.3 million, up 183.4% from RM12.8 million in 1QFY2023.

The group said quarterly revenue rose 2.39% year-on-year to RM362.77 million from RM354.31 million, primarily driven by carry-over effect of price increases implemented in 2023, as well as specific price increase on one of the product ranges in 1QFY2024.

Additionally, the group said it implemented various revenue growth management initiatives focused on enhancing the product and channel mix.

On a quarter-on-quarter basis, Dutch Lady’s net profit rose 16.79% from RM22.83 million in 4QFY2023, while revenue slipped 0.48% from RM364.53 million due to a changing mix of products sold and seasonal promotional costs.

The group announced an interim dividend of 25 sen per share, unchanged from 1QFY2023, with June 11 as the ex-date and June 20 as payment date.

Moving forward, Dutch Lady said it will continue to focus on optimising costs and cash flow, while planning to lower its fixed cost base and secure internal financing for building and transitioning to new manufacturing facilities.

"The outlook for Dutch Lady remains cautiously optimistic due to the strength of our brands and the increasing need for and recognition of the goodness and nutritional value of milk amongst Malaysians. The company will continue to support local dairy farmers, aiming to enhance both the quantity and quality of locally produced fresh milk," it said.

Shares in Dutch Lady closed 76 sen or 2.3% higher at RM33.76 on Monday, valuing the group at RM2.16 billion. The counter has gained 40.67% year-to-date.

Dutch Lady sees three-fold profit surge in 1Q24.
https://www.thestar.com.my/business/business-news/2024/05/27/dutch-lady-sees-three-fold-profit-surge-in-1q24

KUALA LUMPUR: Dutch Lady Milk Industries Bhd(DLMI) remains cautiously optimistic due to the strength of its brands, and the increasing need for and recognition of milk's goodness and nutritional value amongst Malaysians.

“The company will continue to support local dairy farmers, aiming to enhance both the quantity and quality of locally produced fresh milk,” DLMI said in a filing with Bursa Malaysia.

In the first quarter ended March 31 (1Q24), DLMI’s net profit surged to RM26.6mil compared with RM8.5mil in the same quarter last year, translating to an earnings per share of 41.70 sen against 13.30 sen.

Revenue rose 2.4% to RM362.8mil compared to RM354.3mil last year, primarily driven by the carry-over effect of price increases implemented in 2023, as well as a specific price increase on one of the product ranges in 1Q24.

Additionally, DLMI implemented various revenue growth management initiatives focused on enhancing the product and channel mix.

The dairy group said it will continue to focus on optimising costs and cashflow by restructuring to be more efficient, reducing fixed costs to combat inflation and currency challenges, and securing funds for new manufacturing facilities.

“DLMI is employing cash generated from its operations and working capital to fund the property, plant & equipment (PPE) investments into the new production facility at Bandar Enstek.

“In the event of a shortfall in working capital, the company has sufficient committed undrawn overdraft facilities and an inter-company credit facility that can be utilised,” it said.

DLMI noted that the market continues to experience significant volatility due to a range of domestic and international uncertainties. These include fluctuating foreign exchange rates, variable commodity prices, and potential shifts in regulatory frameworks.

“Although prices of global dairy raw materials have reached a point of stability, they remain historically high and are expected to trend upwards towards the second half of the year. Ongoing geopolitical tensions are causing further fluctuations in raw material prices, which could lead to increasing costs for other commodities.

“The volatility of the ringgit, alongside these global and local uncertainties, as well as forthcoming regulatory updates and changes to the tax system, such as the increase in SST rates, present further challenges that may lead to escalated input costs in the near future,” it added.

AGM is tomorrow 28 May, 10am..

Stop spamming please..

NoTimeToTrade, you are not wrong, all your points are valid..

It’s just that I also subscribed to Buffets advice with his baseball analogy - “The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot.. “

I guess i have this value investing mindset. I don't want to overpay. The price crashed last time due to raw materials prices skyrocketed during pandemic and only start coming down last year, It affected DLMI as well. Another thing that make me nervous is Ffb almost half billion debt.

I like FFB I want to buy, but couldn’t find reasonable price for entry. When it crashed to almost RM1 last time the institutions were snapping them and pushing the price up.. I was hoping it goes sub RM1..

Buying FFB right now is like buying a company with annual profit of RM1 million growing 20%-30% a year at the price of RM60 million. Just to put it into perspective..

I like to support local but FFB valuations is higher than tech stocks like Facebook, Alphabet, Microsoft, etc..

FFB current P/E is 61.. why?

Last QR operating profit excluding accelerated depreciation and one off was RM 59m. If they can maintain that every QR, Annual Operating Profit will be around RM200m. Current market cap is around RM2B, that brings P/E of 10 roughly.

Price prediction RM130, if new factory operates at full capacity (2x old factory) and raw materials prices maintain at current. Might take few years though.

At the closing there’s 63,800 queue buy at 27.58 equivalent RM1.75 million..

RM31 million transacted today. Whose buying?

Used to be RM67. It could return to that price if they can achieve operating profit around RM50+m per QR, which they already did last QR if excluding accelerated depreciation and one off.

Made sense if they have that kind of info..

FFB growth is high YoY but valuation and debt are on the high side. If not for EPF and Aberdeen buying it will be sub RM1.

Fundamental and valuation are good. Future growth with high tech double capacity new factory is good. Plan to be regional manufacturing hub is good. But EPF still has 2.9m shares, are they going to keep selling?

From the QR, regarding accelerated depreciation.

“Pursuant to the Company’s announced investment in our future manufacturing activities, DLMI has identified assets in its Petaling Jaya factory that will not be transitioned to the new site.”

“In light of this, DLMI has implemented accelerated depreciation for the mentioned assets at the start of 2021 financial year, continuing into 2022, 2023 and 2024.”

Dlady actual P/E is hidden by accelerated depreciation cost (due to moving to new factory) and one off (BAPA agreement).

Current P/E is 23 with operating profit of RM27m (latest QR). But operating profit without accelerated depreciation and one off is RM59m (latest QR), that is more than double.

As for EPF, they been reducing (diversifying) stake in Dlady from around 10% to now around 5%. And have been buying, accumulating FFB to now around 10% stake in the company.

The question is, has EPF stop selling? If yes then there’s no more resistance to go up.

Probably 3x in 3 years..

Today around RM14m..

Someone buying few million RM every other day..

My theory EPF is diversifying to FFB, they have been accumulating to about 10% now.

FFB has high growth, but also high debt. Valuation is high P/E 59, but I guess they are banking on the high growth.

Dlady numbers and valuation are good. Growth is decent now, hopefully the new factory will contribute to more growth.

Growth is good but debt too high.
Debt RM444m, revenue (TTM) RM 756m.
P/E is 55, rich valuation probably anticipating high growth.

P/E 58, high.. but nice revenue growth.

P/E below 10 at the current price is achievable.

If accelerated depreciation goes away, and if they can maintain Quarterly Operating Profit around 50m.

Current Operating Profit excluding accelerated depreciation and one-offs is 59.1m.

Current P/E is 21 with accelerated depreciation and one-offs.

From the latest Quarterly Report,

“On a like for-like-basis Operating Profit excluding accelerated depreciation and one-offs is RM59.1 million, marking a 363.2% increase versus the same quarter in 2022. This increase is mainly driven by growth in revenue and the softening costs of dairy raw materials.”

Operating Profit is actually RM59.1m, if excluding accelerated depreciation due to the new factory and one off costs for BAPA agreement.

Probably anticipating better QRs ahead..

Buy if you can hold min 2-3 years. It’s a cyclical play. Bonus play new factory with double capacity but you need 2-3 year to see its full potential.

Dutch Lady gearing up for the future
By Sharen Kaur
November 6, 2023

"When we go live next year, we will be doubling our current capacity. We also have land on the side to double the capacity again in the future.

"So technically, we can manufacture four times more than our current capacity in Petaling Jaya. If you have a factory, you build it based on what you need today, and of course, you always need extra capacity for growth. If you are going to invest RM540 million over a journey of five years, you want to make sure you are building a factory for the next 10 to 20 years.

https://www.nst.com.my/amp/business/corporate/2023/11/975194/dutch-lady-gearing-future

Post-review, DLADY retains its OUTPERFORM rating with a slightly reduced target price of RM26.60 (from RM27.00 previously), while NESTLE's UNDERPERFORM rating remains, with a DCF-derived target price of RM115 held steady. Forecasts and ratings for F&N, PWROOT, AEON, MRDIY, PADINI, and QL remain unchanged.

Kenanga Research - 7 Nov 2023

Yes not many people know but they do inform it in the quarterly report. But that’s good for the investors that do their research. The more you learn the more you earn.

Also not many people know the new factory will be a regional manufacturing hub.

“The new manufacturing hub will house a distribution centre, enabling DLMI to operate an end-to-end production cycle. It will also have a research and development (R&D) centre to enable the dairy company to create and innovate products with export potential, she said.

Ramjeet said DLMI wants to build a regional manufacturing hub and together with parent company Royal FrieslandCampina NV, it is the company’s commitment to raise the nutrition intake among children while at the same time upskill the community.”

Net Income last quarter already improved 12.64% YoY.

They hedge raw materials dominated in USD and other foreign currencies on 6 monthly basis.

“DLMI’s hedging policy is similar to previous years where we are hedging approximately 6 months ahead. Approximately 70% of our purchases are denominated in foreign currencies with USD being the main currency.”

Dutch Lady: To double production at new manufacturing facility next year. Dutch Lady Milk Industries (DLMI) plans to double production next year after shifting to its new RM540m facility in Bandar Enstek, deploying eight production lanes. The facility sits on 12.9 hectares and production is scheduled to commence mid- 2024. (The Edge)