PETALING JAYA: BIMB Securities Research has upgraded Dutch Lady Milk Industries Bhd to BUY from HOLD, citing the dairy producer’s proposed RM17.5 million acquisition of a 35% stake in Jemaluang Dairy Valley Sdn Bhd (JDV), which is expected to strengthen its position in Malaysia’s fresh milk supply chain.
The research house maintained its target price of RM34, representing an upside of about 18% from Dutch Lady’s share price of RM28.78 as at Nov 11.
In a research note, BIMB Securities said the proposed investment would enhance Dutch Lady’s access to locally sourced raw milk and establish a strategic partnership covering milk supply and distribution.
It said the investment rationale extended beyond the 35% equity interest, as the joint venture agreement, together with the proposed raw milk supply and distribution agreements, would allow Dutch Lady to participate more directly in the domestic fresh dairy ecosystem.
