DKSH shares hit seven-month high after strong quarterly results

KUALA LUMPUR: Shares in DKSH Holdings (M) Bhd rose to their highest in about seven months after reporting earnings in line with expectations in the latest quarterly results.

DKSH, one of the top gainers on Bursa Malaysia, rose 5.21%, or 26 sen, to RM5.25 at 9.32 am, its highest level since late October. The counter has gained 6.06% so far this year.

In the first quarter ended March 31, 2025 (1Q25), DKSH’s net profit rose 19% year-on-year to RM48.2mil or 30.56 sen per share, on sales growth, improved cost efficiencies and favourable foreign exchange gains.

Additionally, revenue for the quarter rose 7.1% to RM2.22bil from RM2.07bil in 1Q24.

Hong Leong Investment Bank Research (HLIB Research) said DKSH's latest financial results accounted for 36% of their full-year forecast and 40% of consensus estimates, which it said is broadly in line, considering the seasonal uplift from Chinese New Year and Hari Raya.

“We are encouraged by the strong start to the year, supported by robust festive-driven consumption. While some moderation is expected in the coming quarters due to high base effects, DKSH remains well-positioned to benefit from consumers’ better disposable income trend.

“This is underpinned by government initiatives such as the EPF Account 3 withdrawals, civil service wage hikes, and an increased minimum wage, all of which are likely to lift discretionary spending. With a balanced portfolio spanning premium brands and essential consumer staples, DKSH offers resilient exposure to both ends of the spending spectrum,” HLIB Research said.

HLIB Research has maintained a "buy" call on DKSH with a target price of RM6.95, based on a P/E multiple of 6.7x on its FY25f EPS.

The research house continues to favour DKSH for its diverse product portfolio, which includes both premium and affordable products.