Dairy Farm milking its Singapore cash cows

The company achieved 12% sales CAGR, higher than peers' average of 8%.

According to CIMB, developments in the new markets will be complemented by mature cash generating operations in Hong Kong and Singapore.

Here's more from CIMB:

Riding on ASEAN growth Dairy Farm achieved 12% sales CAGR during 2008-11, higher than peers‟ average of 8%. With accelerating income growth, rapid urbanisation and room to grow for the modern format, its ASEAN markets provide the foundation for the group‟s next phase of growth.

In particular, Indonesia offers enormous potential – it is the largest retail market for Dairy Farm, has a very high proportion of traditional stores and favourable population demographics. Moreover, successful penetration into the new markets (Vietnam, Brunei, the Philippines and Cambodia) would secure the group‟s growth beyond this decade.We expect Dairy Farm to hit 13% sales CAGR in FY11-14.

Uncanny ability to outperform
Dairy Farm has outperformed the FSSTI in every market cycle duringthe past decade. It has not shown any earnings decline over the last 10 years. Among others, this resiliencehas been underpinned by its defensive business model, market leadership and phenomenal ROE track record.