PETALING JAYA: MR DIY Group (M) Bhd
(MR DIY) is expected to be one of the key beneficiaries should the ringgit sustain its strength in the longer term.
Unlike others, the retailer does not hedge its purchases which it imports. These are mostly imported from China.
The latest ringgit exchange rate against the China yuan and the US dollar have shown strength against the previous second quarter’s average respectively, noted UOB Kay Hian Research.
While Mr DIY is seen to gain, the research house noted there is a five-month lag before its margins reflect the more favourable foreign exchange rate due to its inventory holding levels.
“We estimate that Mr DIY’s 2025 earnings could see up to a 21% uplift assuming all other factors are constant,” it said.
Other notable beneficiaries, should the ringgit sustain its strength, include Farm Fresh Bhd.
The research house noted its “sell” call on the company, as valuations are lofty and may not present any further opportunities anymore. But for companies such as Fraser & Neave Holdings Bhd and Nestle (M) Bhd, any foreign exchange gains may be more muted since they have export sales as well.
