Dis-Chem Pharmacies Ltd: Margin expansion remains compelling

研报英文原文证据摘录

Dis-Chem Pharmacies Ltd: Margin expansion remains compelling

IdeaM

Risk Reward – Dis-Chem Pharmacies Ltd (DCPJ.J)

KEY EARNINGS INPUTS

Drivers 2026 2027e 2028e 2029e

ROIC (%) 13.1 15.1 16.6 17.7

Gross Margin (%) 22.0 22.0 22.0 22.0

Operating Margin (%) 4.3 4.9 5.3 5.6

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Improved cost efficiencies hold the key to better RISKS TO UPSIDE FY Feb 2027e

EBIT margins in both the Retail and Wholesale Better sales growth, through stronger space

divisions. A new partnership with Capitec should expansion Sales / 47,177

improve the effectiveness of DCPs promotional New business gained in the Wholesale channel Revenue 46,508 48,213

activity and increase sales. Higher SEP (price inflation) increases, (ZAR, mn) 47,464

bolstering sales

GLOBAL REVENUE EXPOSURE Expense efficiencies from an improved 3,800

dispensing process EBITDA

3,531 3,953

RISKS TO DOWNSIDE (ZAR, mn) 3,736

100% MEA Increased promotional activity weighing on GP

margins

1,265

Prolonged weak economic cycle in South Africa Net income

1,150 1,500 Unfavourable regulatory changes (ZAR, mn)Source: Morgan Stanley Research Estimate 1,301 Declining trading densities as DCP adds storesView explanation of regional hierarchies here

OWNERSHIP POSITIONING EPS 148

134 169

(ZAc)

Inst. Owners, % Active 4.3% 149

HF Sector Long/Short Ratio 1x

HF Sector Net Exposure 0.2% Mean Morgan Stanley Estimates

Source: Refinitiv, Morgan Stanley Research

Refinitiv; MSPB Content. Includes certain hedge fund

exposures held with MSPB. Information may be

inconsistent with or may not reflect broader market

trends. Long/Short Ratio = Long Exposure / Short

exposure. Sector % of Total Net Exposure = (For a

particular sector: Long Exposure - Short Exposure) /