DKSH (1K) | Buy | Overlooked performance materials pearl

研报英文原文证据摘录

DKSH (1K) | Buy | Overlooked performance materials pearl

DKSH Buy | Target Price: CHF72.00

Performance materials pearl

Impact from the supply disruption caused by the Middle-East conflict

Despite rising raw material costs caused by the closure of the Strait of Hormuz, DKSH has an asset-

light, pass-through business model. Indeed, it has reported an acceleration in its business,

particularly in Asian life sciences, amid customer stocking ahead of expected price rises. Europe

also improved. Its business was already growing by 5%+ in Asia during 2025, but the unit has been

weighed down by North America and Europe, which account for a combined c. 40% of the unit.

With volumes improving and strong pricing power, we see solid organic sales growth (H1 2025 at

<1%). DKSH has no exposure to the Middle East region. However, it has cautioned that some Asian

countries are likely to be hurt by higher oil prices, which could weigh on consumer sentiment.

China: an opportunity rather than a threat

The company has highlighted its strong position with Chinese suppliers and in the Chinese

market, with c. 8% of its overall performance materials business in the country. It currently does

not view Chinese competition as a threat to its business in Asia. However, it has historically

highlighted the competitive situation in the North American market from Chinese suppliers. North

America accounts for around c. 8% of its performance materials business, is mainly focused on

industrials, and has weighed.

M&A

DKSH potentially has c. CHF1bn in firepower for acquisitions and follows a strategy of bolt-on

acquisitions for all of its business units. While most of the group’s activities are centred on Asia,

its performance materials business is more geographically diversified. Indeed, its last sizeable