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Dutch Lady’s short-term technicals look weak, with bearish momentum and resistance near RM28, support around RM27. Fundamentals remain solid with strong cash reserves, steady dividends, and good capital returns. Q1 profit dipped due to transition costs, but valuation (~18× P/E) suggests about 23% upside to a RM34 target. Watch for negative free cash flow, which could affect growth if it continues.
Dutch Lady Milk is trading around RM 27.40 with stable short-term movement expected. Analysts rate it a “Strong Buy” with a 12-month target of RM 34.00 (24% upside). Strong financials and consistent dividends support a positive mid-term outlook.
Historically the company delivered > 50% ROE. Last year was a bad one with 12%. But at 12% it is much better than most Bursa companies. The question is whether you believe that the business fundamentals has changed so that the historical performance is no longer valid or whether last year was an anomaly.
