Quick take: Mr DIY falls despite posting record quarterly net profit

KUALA LUMPUR: Shares in MR DIY Group (M) Bhd fell in early trade despite posting a stellar first quarter results amid a weak broader market.

The home improvement retailer fell 1.25%, or five sen to RM3.94. Mr DIY-CA added 5.26% to 90 sen and Mr DIY-CB rose 1.39% to 73 sen.

Mr DIY’s net profit has more than doubled to RM124.79mil in the first quarter (Q1) ended March 31, 2021 from RM58.46mil a year earlier.

Its revenue in Q1 increased 62.93% to RM870.18mil from RM534.09mil.

The group declared a dividend of 0.8 sen per share, amounting to RM50.21mil, to be paid on June 17.

RHB Research said Mr DIY’s Q1 results exceeded expectations for the second consecutive quarter on stronger-than-expected sales growth.

“Core net profit of RM125mil (+113% YoY) accounted for 24% and 25% of ours and consensus forecasts but we expect earnings to further improve sequentially in tandem with new store expansion,” it said.

The research house has raised FY21F-23Fearnings by 4% after inputting more aggressive sales growth assumptions.

“Correspondingly, our DCF-derived target price rises to RM4.71 as we also rollover the valuation base year to FY22F.

“Our target price implies 46.5x FY22FP/E –in line with valuations ascribed to other large-cap consumer counters,” it said.

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