Day 72 of Fundamental Daily, YAPSS will be covering DKSH Holdings (Malaysia) Berhad's fundamental via a short animated video. I hope it helps and please enjoy the video, see ya! #YAPSS #FundamentalDaily #DKSHHoldingsMalaysiaBerhad

Click the on the link to find out more: https://youtu.be/O3aiw1AzDJ8

HARISON vs DKSH

• DKSH Marketing and Distribution Service and Logistics Services segment can be classified as Trade and Distribution Segment. Hence both company make almost all their profit from Trade and Distribution Segment.

• Both company did not make much on the retail segment. HARISON only make 1% and DKSH is making loss in their retail segment for the year 2019.

• Both companies had one percent higher gross profit margin and operating margin for the year 2019 compared to 2018.

• DKSH nett profit margin did not increase for the year 2019 because of high financial cost for the year 2019.

• DKSH financial cost had increase by 457 % for the year 2019.

• HARISON had better gross profit margin, operating margin and nett profit margin compared to DKSH.

• HARISON has better solvency ratio compared to DKSH

• DKSH total debt to equity ratio had increase from 0.10 in 2018 to 0.85 in 2019

• DKSH had lower cash conversion cycle (36.28 in 2019) compared to HARISON (60.02 in 2019)

• DKSH had intangible to book value had increase from 0.03 % in 2018 to 63.51 % in 2019

• Both HARISON and DKSH had similar inventory to sales ratio

• HARISON is the smaller company in term of market cap compare to DKSH

• HARISON had lower P/E ratio which is 11.03 compare to DKSH which is 12.24

• HARISON had higher dividend payout compared to DKSH

• HARISON had  higher dividend yield of 5.41 % compared to DKSH which is 2.8 %

DKSH Malaysia got a one time boost with its 2019 acquisitions

2019 was a crucial year for the Group. It acquired Auric Pacific that had a strong presence in the food service channel. It also covered chilled and frozen products in both food service and grocery channels.

The acquisition boosted DKSH revenue growth. Furthermore, returns that were declining for some time seemed to reach the bottom in 2019 and began to improve. But these improvements seem to be tapering off suggesting that the 2019 acquistion was a one-time boost.

The positive sign is that there is more than 30% margin of safety at the current market price. These suggest that if you are going to invest in DKSH, it should view it as a cigar-butt investment rather than investing in a compounder.