DFI Retail Group Holdings stands to benefit from some tailwinds, CGS International analysts say in a research report, as they upgrade the stock's rating to add from hold.

It also raises the target price to US$2.71 from US$1.85. The tailwinds include a quicker recovery in the Asian retailer's Hong Kong supermarket sales, growth in Southeast Asia, and a stronger-than-expected margin uplift from cost efficiencies, the analysts note.

The company's underlying operating margins are expected to expand by 40 bps during 2024-2027, as the recovery in the Food and Home Furnishings segments could offset operational deleveraging in the Convenience Store segment and the sales mix shift in the Health & Beauty segment.

Shares are down 0.9% at US$2.25.