It does not get any sweeter

  • 3Q21 EBITDA slightly below our expectations; increased 20.8% y-o-y to US$6.4m
  • 3Q21 revenue rose 4.1% y-o-y to US$87.0m
  • Onward to brighter quarters; FY21-23F EPS CAGR of 25%
  • Maintain BUY with a higher TP of S$1.07

Investment Thesis:

Undervalued consumer stock with strong EPS CAGR. Delfi’s valuation is attractive at a 12.5x FY22F PE, which is -1.8 SD of its four-year historical mean and is at a 38% discount to its Indonesian-focused peer-average of 20.1x. It is also positioned for recovery from FY21-23F, with an earnings CAGR of 25%.

We are past the worst quarter. 
As COVID-19 cases in its key operating regions begin to subside, vaccination rates rise, and countries learn to manage the COVID-19 pandemic better, we believe that we are past the worst quarter, which was 3Q20.

Redesigned SilverQueen to target the younger individuals in Indonesia. 
Delfi has launched two new healthier products as well as refreshed products under its SilverQueen brand. These efforts are to target the Gen-Z and Millennials in Indonesia, and we believe this initiative allows Delfi to capitalise on Indonesia’s growing millennial middle class.



Maintain BUY with a slightly higher TP of S$1.07. We raise our TP as we roll forward our PE peg to FY22F earnings. We maintain our PE peg at 18.0x. Delfi is currently trading at 12.5x FY22F PE, which is at -1.8 SD and is at a c.38% discount to its peers.Where we differ:
We believe that a continued recovery of the Indonesian Consumer Confidence Index should drive share price higher for Delfi.

Key Risks to Our View:

Worsening of the COVID-19 pandemic in Indonesia and regional markets.