Mr DIY Group (MRDIY MK): A Value-For-Money Proposition; Stay Buy
8 August 2025
Target Price (Return): MYR1.87 (+16.1%)
Price (Market Cap): MYR1.61 (USD3,200m)
ESG Score: 3.2 (out of 4)
Avg Daily Turnover (MYR/USD): 14.9m/3.51m
Analyst
Soong Wei Siang
+603 2302 8130
soong.wei.siang@rhbgroup.com
Share Performance (%)
| YTD | 1m | 3m | 6m | 12m | |
|---|---|---|---|---|---|
| Absolute | (13.0) | (5.3) | (8.0) | (4.2) | (21.9) |
| Relative | (7.3) | (6.1) | (7.7) | (1.6) | (19.2) |
52-wk Price low/high (MYR): 1.30 – 2.25
Investment Highlights
- Maintain BUY and TP of MYR1.87, c.16% upside and 4% FY26F yield. Mr DIY Group’s 2Q25 results could meet expectations on robust GPM and outlet expansion. The stock is trading at 20-30% discount to other comparable retailers under our coverage, which we believe is unwarranted. This consideration of limited degree of earnings upside is offset as a major proxy to capture the resilient domestic consumer spending whilst the sustainable GPM expansion will translate into earnings from the impact of rising opex.
- Mr DIY is scheduled to release its 2Q25 results on 12 August. We estimate net profit to come in at MYR150-160m – meeting our and consensus’ forecasts, implying a flat YoY and QoQ growth (MYR155m). It will indicate a QoQ decline from the high 1Q25 base (MYR170m) that was boosted by an earlier timing of Aidilfitri festival this year. Hence, we expect 2Q25’s SSSG to trend softer (1Q25: >0.6%) on a weaker seasonality, with consumer sentiment staying subdued. On a more positive note, the heightened GPM (1Q25: 47.8%, +2ppt YoY) should hold up on favourable FX and increasing scale of operations. We expect dividend payout to remain generous (we assumed a payout ratio of 75%), supported by strong cash flow generation.
- In a firm position to capture the resilient consumption. In view of the elevated cost of living, the inflation-savvy consumers will continue to be compelled to downtrade or bargain hunt to stretch their money. Such environment bodes well for Mr DIY as it is positioned to capitalise by leveraging its entrenched store network (>1400 stores), value-for-money product offerings, and established brand equity. On top of that, the recent enrolment into the Sumbangan Asas Rahmah (SARA) initiative (page 4) could be another avenue to capture the steady consumption of lower-income groups if it were to be significantly scaled up in the future.
- Outlet expansion and GPM the growth drivers. Outlet expansion will remain the main growth driver with Mr DIY targeting to open at least 190 of new stores. This includes its formats with CIONM partner KK Group in FY25F. Whilst the expansion of Mr DIY Plus network will improve the penetration into the underserved markets, the tie-up with KK Group will broaden the total addressable markets to better reach female and Gen Z consumers with the offering of beauty and wellness, lifestyle, and fashion products. Meanwhile, we believe the current GPM tailwind are sustainable and would more than offset the lackluster SSSG trends and rising opex (wages, rentals, and utilities) stemming from various reform measures.
- Risks to our recommendation include a major delay in expansion plans and persistent weak consumer sentiment.
Price Chart: MRDIY MK (MRDIY) vs Relative to FBM KLCI (BHS)
A line chart illustrates Mr DIY’s stock price from late 2022 to mid-2025. The stock shows a general downward trend from late 2022 to a low in late 2023, followed by a period of volatility and a slight recovery into 2025.
Forecasts and Valuation
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover (MYRm) | 4,359 | 4,651 | 5,074 | 5,561 | 6,056 |
| Recurring net profit (MYRm) | 561 | 569 | 639 | 715 | 771 |
| Recurring net profit growth (%) | 16.9 | 1.5 | 12.3 | 11.9 | 7.8 |
| Recurring P/E (x) | 26.55 | 24.16 | 23.29 | 20.81 | 19.30 |
| P/B (x) | 8.5 | 7.7 | 7.1 | 6.5 | 6.0 |
| P/CF (x) | 15.30 | 15.96 | 14.01 | 13.86 | 13.18 |
| Dividend Yield (%) | 2.0 | 3.2 | 3.6 | 3.9 | — |
| EV/EBITDA (x) | 13.09 | 12.58 | 11.33 | 10.40 | 9.61 |
| Return on average equity (%) | 35.3 | 30.9 | 31.7 | 32.7 | 32.5 |
| Net Debt to equity (%) | net cash | net cash | net cash | net cash | net cash |
Overall ESG Score: 3.2 (out of 4)
E Score: 3.0 (EXCELLENT)
S Score: 3.3 (EXCELLENT)
G Score: 3.3 (EXCELLENT)
Please refer to the ESG analysis on the next page
Emissions And ESG
Trend analysis
Absolute emissions are on an increasing trend in tandem with business expansion.
Emissions (tCO2e)
| Dec-22 | Dec-23 | Dec-24 | Dec-25 | |
|---|---|---|---|---|
| Scope 1 | 9,511 | 11,563 | 12,218 | na |
| Scope 2 | 96,588 | 120,266 | 146,707 | na |
| Scope 3 | na | na | 12,522 | na |
| Total emissions | 106,099 | 131,829 | 171,447 | na |
Latest ESG-Related Developments
- Advanced its decarbonisation efforts by starting to track Scope 3 emissions.
- Continued to expand its eco-product range, which contributed over 6% of its FY24 revenue, edging closer to the target of 10% by 2030.
- Investments in employee training almost doubled YoY in FY24 whilst the training hours/employee also increased significantly.
- Invested more than MYR1m through its Mr DIY foundation (FY23: MYR595k), reflecting its commitment to drive long-term social impact.
ESG Unbundled
Overall ESG Score: 3.2 (out of 4)
Last Updated: 5 May 2025
E Score: 3.0 (GOOD)
Mr DIY embedded key environmental considerations into its operations and procurement practices. This includes expanding its eco-product range, ie products that consume less water or energy or are made from recycled or biodegradable materials. It also prioritises renewable energy adoption by installing solar panels across its facilities.
S Score: 3.3 (EXCELLENT)
Mr DIY is investing in the professional development and well-being of its staffs by providing more training hours and expenditure. It has also expanded its commitment to employee well-being with new initiatives, including health screenings, vaccination programmes, and enhancements to its medical facilities.
G Score: 3.3 (EXCELLENT)
The company provides comprehensive set of information and statistics on its business operations. It is also transparent with the expansion plan. The current composition of the Board includes 66% of independent directors and 50% of women directors.
ESG Rating History
A chart shows the ESG rating history from August 2023 to August 2025. The rating remains stable at 3.2 throughout the entire period shown.
Financial Exhibits
Company Information
Asia
Malaysia
Consumer Cyclical
Mr DIY Group
MRDIY MK
Buy
Valuation basis
Discounted Cash Flow
Key drivers
- Store expansion;
- Robust SSSG;
- Market share gain.
Key risks
- Supply disruption;
- Major epidemic outbreak;
- Intense competition.
Company Profile
Mr DIY is the largest home improvement retailer in Malaysia, with an estimated market share of 25.4% in revenue terms in 2018. The group is principally involved in the retail of home improvement products and mass merchandise in Malaysia and Brunei.
Financial summary (MYR)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring EPS | 0.06 | 0.06 | 0.07 | 0.08 | 0.08 |
| DPS | 0.03 | 0.05 | 0.05 | 0.06 | 0.06 |
| BVPS | 0.19 | 0.21 | 0.23 | 0.25 | 0.27 |
| Return on average equity (%) | 35.3 | 30.9 | 31.7 | 32.7 | 32.5 |
Valuation metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring P/E (x) | 26.55 | 26.16 | 23.29 | 20.81 | 19.30 |
| P/B (x) | 8.5 | 7.7 | 7.1 | 6.5 | 6.0 |
| FCF Yield (%) | 5.0 | 5.3 | 6.3 | 6.3 | 6.6 |
| Dividend Yield (%) | 2.0 | 3.2 | 3.2 | 3.6 | 3.9 |
| EV/EBITDA (x) | 13.09 | 12.58 | 11.33 | 10.40 | 9.61 |
| EV/EBIT (x) | 18.08 | 17.58 | 15.74 | 14.31 | 13.26 |
Income statement (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover | 4,359 | 4,651 | 5,074 | 5,561 | 6,056 |
| Gross profit | 1,977 | 2,133 | 2,451 | 2,658 | 2,895 |
| EBITDA | 1,133 | 1,168 | 1,280 | 1,385 | 1,488 |
| Depreciation and amortisation | (313) | (332) | (359) | (378) | (410) |
| Operating profit | 820 | 835 | 922 | 1,006 | 1,078 |
| Net interest | (70) | (79) | (85) | (87) | (89) |
| Pre-tax profit | 753 | 763 | 857 | 960 | 1,034 |
| Taxation | (192) | (194) | (218) | (244) | (263) |
| Reported net profit | 561 | 569 | 639 | 715 | 771 |
| Recurring net profit | 561 | 569 | 639 | 715 | 771 |
Cash flow (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Change in working capital | 89 | 15 | (35) | (62) | (95) |
| Cash flow from operations | 973 | 933 | 1,062 | 1,074 | 1,129 |
| Capex | (229) | (144) | (126) | (136) | (140) |
| Cash flow from investing activities | (247) | (166) | (126) | (136) | (140) |
| Dividends paid | (303) | (474) | (479) | (537) | (578) |
| Cash flow from financing activities | (628) | (721) | (793) | (922) | (929) |
| Cash at beginning of period | 138 | 232 | 276 | 414 | 478 |
| Net change in cash | 98 | 46 | 143 | 16 | 60 |
| Ending balance cash | 236 | 278 | 419 | 430 | 538 |
Balance sheet (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total cash and equivalents | 232 | 276 | 414 | 478 | 532 |
| Tangible fixed assets | 827 | 882 | 891 | 902 | 908 |
| Total investments | 34 | 60 | 81 | 121 | 167 |
| Total assets | 3,551 | 3,802 | 4,030 | 4,267 | 4,491 |
| Short-term debt | 191 | 128 | 100 | 100 | 100 |
| Total long-term debt | 11 | 11 | 11 | 11 | 11 |
| Total liabilities | 1,806 | 1,864 | 1,933 | 1,991 | 2,022 |
| Total equity | 1,745 | 1,938 | 2,097 | 2,276 | 2,469 |
| Total liabilities & equity | 3,551 | 3,802 | 4,030 | 4,267 | 4,491 |
Key metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Revenue growth (%) | 9.4 | 6.7 | 9.1 | 9.6 | 8.9 |
| Recurrent EPS growth (%) | 16.9 | 1.5 | 12.3 | 11.9 | 7.8 |
| Gross margin (%) | 45.4 | 45.8 | 48.3 | 47.8 | 47.8 |
| Operating EBITDA margin (%) | 26.0 | 25.1 | 25.2 | 24.9 | 24.6 |
| Net profit margin (%) | 12.9 | 12.2 | 12.6 | 12.9 | 12.7 |
| Dividend payout ratio (%) | 54.0 | 83.2 | 75.0 | 75.0 | 75.0 |
| Capex/sales (%) | 5.3 | 3.1 | 2.5 | 2.4 | 2.3 |
| Interest cover (x) | 11.6 | 10.6 | 10.8 | 11.5 | 12.1 |
Joining the SARA bandwagon
According to its social media page, Mr DIY has enrolled into the SARA initiative. 20 outlets have been enabled and we understand another 70 stores have been approved and will be rolled out progressively. Whilst the number of stores involved is relatively insignificant at this stage, we see the possibility of it being ramped up further going forward if the reception and lift to footfall is encouraging.
Figure 1: Mr DIY is now a panel retailer under the SARA initiative
A graphic shows the logos for ‘Sumbangan Asas Rahmah’, ‘MyKasih Foundation’, and ‘MR.DIY’, announcing that MR.DIY is now a retail partner (‘Kini Rakan Runcit’) for the MyKasih program.
Figure 2: The 20 enabled outlets effective Aug 2025
A list of participating MR.DIY branches in the ‘Sumbangan Asas Rahmah’ initiative, categorized by state: Kuala Lumpur, Johor, Perak, and Kelantan.
Figure 3: Mr DIY covers c.70% of the product categories
A graphic illustrates the categories of goods available under the ‘Sumbangan Asas Rahmah’ program at MR.DIY. These include food items (rice, flour, instant noodles, beverages) and household cleaning products.
Figure 4: SARA-related promotion
A promotional flyer showing various grocery and household items with their prices, part of the ‘Sumbangan Asas Rahmah’ promotion at select MR.DIY stores.
Recommendation Chart
Recommendation & Target Price Chart
The chart displays Mr DIY’s stock price from October 2020 to April 2025, alongside recommendation markers (Buy, Neutral, etc.). The price shows a significant decline from a peak in early 2022.
Historical Recommendations
| Date | Recommendation | Target Price | Price |
|---|---|---|---|
| 2025-05-06 | Buy | 1.87 | 1.74 |
| 2025-02-28 | Buy | 1.87 | 1.38 |
| 2024-11-15 | Buy | 2.35 | 1.82 |
| 2024-10-02 | Buy | 2.59 | 2.05 |
| 2024-08-13 | Buy | 2.40 | 2.10 |
| 2024-05-10 | Buy | 2.20 | 1.80 |
| 2024-02-25 | Buy | 2.20 | 1.53 |
| 2023-11-20 | Buy | 2.29 | 1.61 |
| 2023-08-10 | Buy | 2.29 | 1.55 |
| 2023-05-11 | Buy | 2.48 | 1.59 |
| 2023-02-14 | Buy | 2.48 | 1.75 |
| 2022-11-08 | Buy | 2.62 | 1.98 |
| 2022-08-04 | Buy | 2.90 | 2.32 |
| 2022-05-16 | Buy | 4.50 | 2.37 |
| 2022-02-17 | Buy | 4.59 | 2.49 |
RHB Guide to Investment Ratings
Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage
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| Analyst | Company |
|---|---|
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