KUALA LUMPUR, July 28 — DKSH Holdings (M) Bhd has emerged as one of the top gainers on the local exchange today, propelled by its long-term relationship with the frontrunners in the development of a Covid-19 vaccine.
At 10.14am, DKSH surged 11.11 per cent to RM3.10, with 169,900 shares changing hands.
In a note today, Public Investment Bank Bhd (PIVB) said the company had garnered some recent trading interest, even surging 23 per cent in a single day on July 22, 2020.
“We think this may well be linked to its long-term relationship with AstraZeneca and Pfizer, one of the many frontrunners in the development of a Covid-19 vaccine and the possibilities of it being a distribution arm should either one be commercially viable,” it said.
With this vaccine-related development (if any) still very much a long-shot at this juncture, PIVB, nevertheless, sees recoveries in consumption spending in light of the gradual improvement in economic activity, following the easing of the movement control order and the cut in interest rates.
The research house had upgraded its call on DKSH to “Trading Buy” from “Neutral”, with a higher target price of RM3.80 from RM2.65 previously, based on 11 times price-to-earnings ratio, which is near its five-year historical average.
“We raise our earnings forecast of the financial year ending December 31, 2020-2022 (FY20F-FY22F) by four to seven per cent to account for recoveries in consumer consumption.
“We are also rolling-forward our valuation to FY21F earnings per share,” it said, adding that DKSH had recently, secured new partnerships with American food company Kraft Heinz and coffee brand Moccona. — Bernama
