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Defensive in the face of FMCO

■ 9M21 core net profit of RM57.7m (+61.4% yoy) was within expectations, at 74% of our and 72% of Bloomberg consensus full-year estimates.
■ We expect demand and operating margins to rebound qoq in 4Q21 on the back of the reopening of economic activities and higher economies of scale.
■ Reiterate Add with a higher TP of RM6.20 (10x CY23F P/E). We like DKSH for its solid earnings prospects with a 3-year core EPS CAGR of 22%.

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