(01-06-2016, 11:36 PM)Choon Wrote: [ -> ]Audio webcast of FY2015 results here (http://webcast.irasia.com/dairyfarm/annu...chived.php). Reveals some parts of DF's new strategy under new CEO as well as his retail philosophy.
As common in company restructurings/revamps, I believe there will be short-term pain and cost that DF has to bear (and for more than one or two years) before actions bear fruits. The important and uncertain thing is whether the pain and cost that is incurred re-positions the company stronger for the long-term. And this is where as outsider investors, we have fun in making the judgement call (potentially stronger future vs current share price).
Choon
http://commonMcommonS.wix.com/wisdom
Thank for the link. Let me share my view, as another outsider.
The so-call restructurings/revamps, started more than 2 years ago, is more of sustaining changes, rather than a disruptive one. I reckon, the "restructurings/revamps" have taken too long for fruitful results, from an outsider investors perspective.
There are nothing wrong in the strategy. Enhancing the use of IT technology is necessary, and higher participation of fresh product, is a market trend. I am more concern on the execution. Retail biz is volatile, due to macro environment, and event-driven customer needs. Agility to tackle short to mid-term changes, is an important moat of retailer. Base on the observation as outsider, the company has been lacking in tackling macro changes, and changes in customer behavior.
DF is still a good company, with its leading multi-format sales, and geographical coverage in the region. The only lacking format, is probably the e-commerce. Fresh product mix ratio isn't disclosured. It should be very similar as in 2013, when the current team has taken over the driver seat, simply from gross margin figures. The current effort to improve direct-sourcing and IT tech investment, should be on fresh product supply chain. DF is mature enough to do that already for other products. Good handing of fresh product, needs more than just direct-sourcing and technologies, obviously.
What is the outlook? IMO, it depends on the execution. The management is moving on right direction, IMO. The partnership with YongHui, will enable the company to improve its mix ratio of fresh product, thus improve the gross margin, and offset the heightening cost. One venture of YongHui partnership, is to explore the OTO (online-to-offline) model. Once proven viable, DF can enhance its e-commerce format, which is current pretty weak, IMO.
(not vested, and observing)