CGSI Research said an expected 6% growth in domestic demand this year may help prop up the earnings growth of the consumer discretionary sector.
PETALING JAYA: MR DIY Group (M) Bhd
may deliver a strong compounded annual growth rate (CAGR) net profit until the financial year 2026 (FY26) despite any short-term concerns.
According to CGS International (CGSI) Research, earnings in the near term are seen to be dragged down by the issues faced by its automated warehouse and declining same store sales growth (SSSG).
But it still projects CAGR for the group’s earnings per share from FY23 to FY26 to grow by some 24%.
In the group’s third-quarter results briefing, MR DIY also stated that it intends to continue expanding its network and brand presence into Sabah and Sarawak, and the East Coast states of Peninsular Malaysia in the coming FY25.
This will help increase its revenue as new stores are opened, CGSI Research said.
“We think that fears of potentially weak fourth-quarter results have led to MR DIY’s share price falling 20% in the year-to-date period and 30% since the release of its third-quarter results on Nov 14,” it said.
An expected 6% growth in domestic demand this year may help prop up the earnings growth of the consumer discretionary sector, it said.
“We see key drivers of consumer sentiment and spending in 2025 from higher civil servant salaries from December 2024, minimum wage increases from February 2025 and higher monthly cash handouts to lower-income households,” CGSI Research said.
Also, the increased inbound and domestic tourism and any improved consumer sentiment from a strengthening ringgit could help further.
MR DIY’s shares at RM1.47 during yesterday’s trade were at 16.7 times the 2025 forward price-to-earnings ratio and this presents an attractive entry point, said the research house.
It maintained its “add” call on the counter with an unchanged Gordon Growth Model-based target price of RM2.60 per share.
