Overview. On quarterly basis, MR.D.I.Y.’s top and bottom-line rose by 1% and 10% to RM768.0m and RM90.4m attributed to positive contribution from new stores (+22% yoy) as well as higher average basket size of RM30 (+12% yoy). The average sales per store only improved 1% to RM256m as 11% of its stores had to close in month of July due to lockdown.
Key Highlights: On yearly basis, net profit was lower by -20% yoy during the quarter owing to the 1) lower operating income recorded coupled with store closures as operating expenses continued to be incurred during the said period.
Against estimates: Inline. 9MFY21’s earnings of RM297.3m, accounted for 76% and 49% of our/consensus full-year forecast.
Outlook. Analysing from store per area perspective, approximately 262 of MR.DIY stores or 32% are in Klang Valley area are now in phase 4, while same goes to the East Coast and Southern areas where most of the states are in phase 3 & 4 recovery – indicating a better prospect for its operation stores. As the MIER CSI has now recovered to its highest level since 3Q13 at 101.7 – with i-Citra and loan moratorium facilities providing a boost to household income – we remain sanguine on MR. DIY’s outlook.
Earnings revision. Since MR.D.I.Y. generates annual profit of well above RM100m, we revised down our FY22F earnings estimates by 8% to factor in the special one-off “prosperity taxes” of 33% announced by the government during last week’s Budget 2022.
Our call. We are maintaining BUY call with new TP of RM4.00 (previously RM4.10) based on average FY22/23F EPS of 6.7sen and +0.5SD of 59.5x. We think our valuation is justified, judging from our intrinsic value estimate of RM4.20 if we cross-check using EV/ROIC valuation. We like MR.DIY for its robust fundamental, highest ROE among its peers and a market leader position with a 35% share in home improvement market in Malaysia.
Source: BIMB Securities Research - 3 Nov 2021
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MRDIYCreated by kltrader | Aug 12, 2024
Created by kltrader | Aug 12, 2024
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Created by kltrader | Aug 09, 2024