AmInvestment Bank
CONSUMER
MR DIY GROUP (M)
(MRDIY MK EQUITY, MRDI.KL)
14 Aug 2025
BUY
(Maintained)
MR DIY GROUP (M): Improved margins offset weak SSSG.
Liew Jin Sheng
liew.jin-sheng@ambankgroup.com
+603 2036 1687
Rationale for report: Company Result
| Price | RM1.60 |
| Fair Value | RM1.90 |
| 52-week High/Low | RM2.26/RM1.28 |
| Key Changes | |
|---|---|
| Fair value | ↔ |
| EPS | ↔ |
| YE to Dec | FY24F | FY25F | FY26F | FY27F |
|---|---|---|---|---|
| Revenue (RM mil) | 4,651.4 | 5,258.1 | 5,768.0 | 6,287.7 |
| Core net profit (RM mil) | 617.7 | 665.2 | 716.9 | 805.2 |
| FD Core EPS (sen) | 6.0 | 7.0 | 7.6 | 8.5 |
| FD Core EPS growth (%) | 1.3 | 16.9 | 7.8 | 12.3 |
| Consensus Net Profit (RM mil) | 634.0 | 700.3 | 764.2 | |
| DPS (sen) | 5.0 | 5.4 | 5.8 | 6.5 |
| PE (x) | 26.6 | 22.8 | 21.1 | 18.8 |
| EV/EBITDA (x) | 12.9 | 11.0 | 10.2 | 9.1 |
| Div yield (%) | 3.1 | 3.4 | 3.6 | 4.1 |
| ROE (%) | 30.9 | 33.0 | 32.9 | 34.2 |
| Net Gearing (%) | nm | nm | nm | nm |
Investment Highlights
We maintain our BUY recommendation on MR D.I.Y. Group (M) (Mr DIY) with an unchanged target price of RM1.90. Our target price is based on a target PE of 25x FY26F, which is in line with its 3Y historical average. We continue to ascribe a neutral ESG rating of 3-star to Mr DIY. 1HFY25 core net profit of RM351.8mil was in line. YTD DPS at 2.9 sen and we expect FY25F DPS of 5.4 sen (3.4% yield) backed by RM282.5mil net cash. Revenue grew 5.6% YoY on store expansion, while a 2.1ppt GP margin lift offset weaker SSSG (-3%) and higher costs. The group added 70 stores to 1,509 (slightly behind target). To counter the negative SSSG, the group is rolling out key initiatives such as Mr TOY 2.0 rollout, RM2 campaign, and My Kasih programme expansion to boost sales. We continue to like Mr DIY for its exposure to the value-for-money segment with new brands such as KKV, The Colorist and X11 expected to expand its total addressable market.
- Maintain BUY with an unchanged TP of RM1.90. This is based on target CY26F PE of 25x, which is in line with its 3Y historical average. We make no adjustment to our neutral ESG rating of 3-star.
- 1HFY25 performance within expectations. Core net profit stood at RM351.8mil, accounting for 53% of our and 55% of consensus full-year forecasts. DPS declared for the quarter was 1.5 sen, bringing YTD DPS to 2.9 sen (1HFY24: 2.2 sen). FY25F DPS forecast is 5.4 sen (3.4% yield), underpinned by RM282.5mil net cash.
- Margin expansion offsetting weaker SSSG. 1HFY25 revenue rose 5.6% YoY on the back of an expanded store network. Number of transactions grew 7% YoY, partially offset by a 1.2% decline in average basket size. Core net profit increased 10.6% YoY, supported by a 2.1ppt GP margin expansion, though partly eroded by higher staff, utility, and depreciation expenses in line with store expansion. SSSG for 1HFY25 was at -3% as 2QFY25 SSSG slumped to -7.2% YoY. The group added a net new 70 stores in 1HFY25, bringing the total to 1,509 stores, slightly behind its FY25 target of 190 net additions.
- Initiatives to drive sales growth. Key measures include rolling out Mr TOY 2.0 format (targeting 7 stores by year-end; achieving 2x monthly sales of current format; RM500k refurbishment cost/store), expanding the RM2 value campaign (~1,000 SKUs; monthly sales contribution up from <1% to 3%), and participating in the MyKasih programme (currently in 20 stores, with potential wider rollout by Sep-25). These initiatives are aimed at boosting traffic, improving basket size, and sustaining earnings momentum despite near-term SSSG headwinds.
Stock and Financial Data
| Shares Outstanding (million) | 9,474.4 |
| Market Cap (RMmil) | 15,159.0 |
| Book Value (RM/Share) | 0.20 |
| P/BV (X) | 7.8 |
| ROE (%) | 30.9 |
| Net Gearing (%) | – |
| Major Shareholders | |
| Bee Family Limited (50.0%) | |
| EPF (8.8%) | |
| Hyptis (4.9%) | |
| Free Float | 25.7 |
| Avg Daily Value (RMmil) | 15.5 |
Price performance
| 3mth | 6mth | 12mth | |
|---|---|---|---|
| Absolute (%) | (4.2) | 1.3 | (23.8) |
| Relative (%) | (4.4) | 1.6 | (22.7) |
EXHIBIT 1: 2QFY25 EARNINGS SUMMARY
| FYE Dec (RM mil) | 2Q24 | 1Q25 | 2Q25 | QoQ (%) | YoY (%) | 6M24 | 6M25 | YoY (%) |
|---|---|---|---|---|---|---|---|---|
| Revenue | 1,196.2 | 1,257.2 | 1,214.2 | (3.4) | 1.5 | 2,339.3 | 2,471.4 | 5.6 |
| Gross Profit | 544.7 | 601.2 | 579.5 | (3.6) | 6.4 | 1,068.0 | 1,180.7 | 10.6 |
| EBITDA | 307.7 | 339.4 | 318.2 | (6.2) | 3.4 | 600.2 | 657.7 | 9.6 |
| D&A | (82.6) | (88.0) | (88.6) | 0.7 | 7.3 | (161.6) | (176.6) | 9.3 |
| EBIT | 225.1 | 251.5 | 229.7 | (8.7) | 2.0 | 438.6 | 481.1 | 9.7 |
| Finance Cost | (19.7) | (19.2) | (18.4) | (4.2) | (6.8) | (38.6) | (37.6) | (2.5) |
| PBT | 207.9 | 234.1 | 212.0 | (9.4) | 2.0 | 403.0 | 446.1 | 10.7 |
| Tax | (52.7) | (60.0) | (53.4) | (10.9) | 1.4 | (102.9) | (113.4) | 10.2 |
| PATAMI | 155.2 | 174.1 | 158.6 | (8.9) | 2.2 | 300.1 | 332.7 | 10.9 |
| Core Net Profit | 164.2 | 183.4 | 168.4 | (8.2) | 2.6 | 318.1 | 351.8 | 10.6 |
| Core EPS (sen) | 1.7 | 1.9 | 1.8 | (8.2) | 2.4 | 3.4 | 3.7 | 10.4 |
| DPS (sen) | 1.2 | 1.4 | 1.5 | 7.1 | 25.0 | 2.2 | 2.9 | 31.8 |
| Margins (%) | ||||||||
| GP margin (%) | 45.5 | 47.8 | 47.7 | -0.1ppt | 2.2ppt | 45.7 | 47.8 | 2.1ppt |
| EBITDA margin (%) | 25.7 | 27.0 | 26.2 | -0.8ppt | 0.5ppt | 25.7 | 26.6 | 1.0ppt |
| Pretax margin (%) | 17.4 | 18.6 | 17.5 | -1.2ppt | 0.1ppt | 17.2 | 18.1 | 0.8ppt |
| Effective tax rate (%) | -25.3 | -25.6 | -25.2 | 0.4ppt | 0.1ppt | -25.5 | -25.4 | 0.1ppt |
| Net profit margin (%) | 13.7 | 14.6 | 13.9 | -0.7ppt | 0.1ppt | 13.6 | 14.2 | 0.6ppt |
Source: Company, AmInvestment Bank Bhd
Company profile
Mr D.I.Y. Group (M) (Mr DIY) engages in the retail of home improvement products and mass merchandise in Malaysia and Brunei with more than 1,400 stores as of end Dec 2024. The Company offers products such as hardware, household, electrical, car accessories, furnishing, stationery. In addition, the Company operates through its e-commerce platform, mrdiy.com.my. The Company was founded in 2005 and is based in Seri Kembangan, Malaysia.
Investment thesis and catalysts
We have a BUY recommendation on Mr DIY as the Company still has ample of room for growth and is venturing into complementary brands such as KKV and THE COLORIST to increase their total addressable market.
Valuation methodology
The stock is valued based on a target FY26F PE of 25x, which is in line with its 3Y historical average forward PE. We think 3Y period is very reflective of the valuation post FBMKLCI inclusion in June 2021.
Risk factors
Mr DIY stores may experience potential cannibalisation due to market saturation, particularly in the Klang Valley area. It is also concerning to note the negative same store sales growth in seven out of the past eight quarters.
EXHIBIT 2: VALUATIONS
| Target PE (x) | 25x |
| FY26 EPS (sen) | 7.6 |
| ESG premium | 0% |
| 12-month target price | 1.90 |
Source: AmInvestment Bank
EXHIBIT 3: PB BAND CHART & EXHIBIT 4: PE BAND CHART
Charts are not displayed in this document.
EXHIBIT 5: ESG RATING
| ESG Parameters | Weightage | Rating | Rationale | |
|---|---|---|---|---|
| Environmental assessment | ||||
| 1. Renewable Energy | RE mix for all the distribution facilities | 30% | * * | 11.2% renewable energy mix in FY24 |
| 2. Scope 1 GHG Emissions Intensity | Co2e/1k transactions reduction | 30% | * * * | 5% reduction in 2024 from 2023 |
| 3. Scope 2 GHG Emissions | Co2e/sqft reduction | 20% | * * | 7% increase in 2024 from 2023 |
| 4. Minimise waste generation | Single use plastic bags per 1k transactions (kg) | 20% | * * * | 15% reduction in plastic usage per transaction for 2022-2024 |
| Weighted score for environmental assessment | 100% | * * * | ||
| Social assessment | ||||
| 1. Health, safety & well-being | Number of lost time injuries | 20% | * * * | 18 in 2024, decreased from 20 in 2022 |
| 2. Women in workforce | % of total workforce | 20% | * * * | 38% in workforce & 49% in senior management |
| 3. Investment in employee training | Hours | 20% | * * * | 41% increase in average training hours per employee. |
| 4. Procurement sourcing from local vendors | % of total procurement | 20% | * * | 34.5% in 2024 |
| 5. CSR programmes | No. of events involved | 20% | * * * | Invested RM1.2M over 289 programmes in 2024. Doubled the amount in 2023. |
| Weighted score for social assessment | 100% | * * * | ||
| Governance assessment | ||||
| 1. Board age diversity | % under 60 years old | 15% | * * * | 50% representation |
| 2. Board women representation | % of total board directors | 15% | * * * | 50% representation |
| 3. Directors with tenure below 6 years | % below 6 years category | 15% | * * | 33% representation |
| 4. Independent board directors | % of total board directors | 20% | * * * | 67% – independent non-exec |
| 5. Remuneration to directors | % of total staff costs | 20% | * * | RM4.2mil – 0.6% of 2024 staff costs |
| 6. Corruption investigations | % of operations that underwent corruption risk assessments | 15% | * * * | 100% |
| Weighted score for governance assessment | 100% | * * * | ||
| Overall ESG Score | ||||
| Environmental score | 40% | * * * | ||
| Social score | 30% | * * * | ||
| Governance score | 30% | * * * | ||
| Overall ESG Score | 100% | * * * | ||
Source: AmInvestment Bank Bhd
EXHIBIT 6: FINANCIAL DATA
Income Statement (RMmil, YE 31 Dec)
| FY23 | FY24 | FY25F | FY26F | FY27F | |
|---|---|---|---|---|---|
| Revenue | 4,359.3 | 4,651.4 | 5,258.1 | 5,768.0 | 6,287.7 |
| EBITDA | 1,121.3 | 1,167.8 | 1,366.8 | 1,473.0 | 1,633.9 |
| Depreciation/Amortisation | (301.3) | – | (388.8) | (429.0) | (464.4) |
| Operating income (EBIT) | 820.0 | – | 978.0 | 1,044.0 | 1,169.5 |
| Other income & associates | 3.6 | 6.4 | 6.7 | 7.0 | 7.4 |
| Net interest | (70.5) | (78.7) | (85.8) | (82.2) | (88.8) |
| Exceptional items | – | – | – | – | – |
| Pretax profit | 753.2 | 763.1 | 898.9 | 968.8 | 1,088.1 |
| Taxation | (192.5) | (194.2) | (233.7) | (251.9) | (282.9) |
| Minorities/pref dividends | – | – | – | – | – |
| Net profit | 560.7 | 568.9 | 665.2 | 716.9 | 805.2 |
| Core net profit | 599.9 | 617.7 | 665.2 | 716.9 | 805.2 |
Balance Sheet (RMmil, YE 31 Dec)
| FY23 | FY24 | FY25F | FY26F | FY27F | |
|---|---|---|---|---|---|
| Fixed assets | 827.1 | 881.7 | 960.8 | 1,003.4 | 1,040.9 |
| Intangible assets | 7.7 | 7.7 | 7.7 | 7.7 | 7.7 |
| Other long-term assets | 1,287.3 | 1,397.7 | 1,650.0 | 1,736.1 | 1,804.8 |
| Total non-current assets | 2,122.1 | 2,287.1 | 2,618.4 | 2,747.2 | 2,853.4 |
| Cash & equivalent | 232.3 | 276.0 | 109.0 | 172.9 | 286.1 |
| Stock | 1,084.4 | 1,082.4 | 1,255.2 | 1,389.4 | 1,514.6 |
| Trade debtors | 106.6 | 148.5 | 172.9 | 189.6 | 206.7 |
| Other current assets | 5.5 | 8.0 | 8.4 | 8.4 | 8.4 |
| Total current assets | 1,428.9 | 1,514.8 | 1,545.5 | 1,760.3 | 2,015.7 |
| Trade creditors | 189.2 | 218.7 | 244.9 | 268.6 | 292.9 |
| Short-term borrowings | 191.1 | 128.2 | 28.2 | 28.2 | 28.2 |
| Other current liabilities | 260.6 | 288.4 | 313.3 | 336.3 | 358.5 |
| Total current liabilities | 640.9 | 635.3 | 586.4 | 633.2 | 679.5 |
| Long-term borrowings | 11.4 | 10.9 | 10.9 | 10.9 | 10.9 |
| Other long-term liabilities | 1,153.4 | 1,218.2 | 1,473.1 | 1,602.9 | 1,728.0 |
| Total long-term liabilities | 1,164.8 | 1,229.2 | 1,484.0 | 1,613.9 | 1,738.9 |
| Shareholders’ funds | 1,745.2 | 1,937.5 | 2,093.5 | 2,260.5 | 2,450.6 |
| BV/share (RM) | 0.18 | 0.20 | 0.22 | 0.24 | 0.26 |
Cash Flow (RMmil, YE 31 Dec)
| FY23 | FY24 | FY25F | FY26F | FY27F | |
|---|---|---|---|---|---|
| Pretax profit | 753.2 | 763.1 | 898.9 | 968.8 | 1,088.1 |
| Depreciation/Amortisation | 301.3 | 2.8 | 388.8 | 429.0 | 464.4 |
| Net change in working capital | 58.7 | (10.4) | (171.0) | (127.2) | (118.1) |
| Others | (140.3) | 179.4 | (147.9) | (169.6) | (194.2) |
| Cash flow from operations | 972.9 | 934.9 | 968.8 | 1,100.9 | 1,240.3 |
| Capital expenditure | (229.3) | (144.1) | (196.6) | (170.4) | (170.4) |
| Net investments & sale of fixed assets | 1.8 | – | – | – | 1.0 |
| Cash flow from investing | (246.9) | (168.5) | (196.6) | (170.4) | (169.4) |
| Debt raised/(repaid) | (154.9) | – | (100.0) | – | – |
| Dividends paid | (264.3) | (397.0) | (509.2) | (549.9) | (615.0) |
| Others | (222.6) | (345.0) | – | (337.8) | (364.7) |
| Cash flow from financing | (628.3) | (720.6) | (609.2) | (887.7) | (979.7) |
| Net cash flow | 97.8 | 45.8 | 163.0 | 42.9 | 91.3 |
| Net cash/(debt) c/f | 213.0 | 258.8 | 421.8 | 464.6 | 556.9 |
Key Ratios (YE 31 Dec)
| FY23 | FY24 | FY25F | FY26F | FY27F | |
|---|---|---|---|---|---|
| Revenue growth (%) | 9.4 | 6.7 | 13.0 | 9.7 | 9.0 |
| EBITDA growth (%) | 16.0 | 4.1 | 17.0 | 7.8 | 10.9 |
| Pretax margin (%) | 17.3 | 16.4 | 17.1 | 16.8 | 17.3 |
| Net profit margin (%) | 12.9 | 12.2 | 12.7 | 12.4 | 12.8 |
| Interest cover (x) | 11.6 | – | 11.4 | 12.7 | 13.2 |
| Effective tax rate (%) | 25.6 | 25.4 | 26.0 | 26.0 | 26.0 |
| Dividend payout (%) | 53.9 | 83.1 | 76.6 | 76.7 | 76.4 |
| Debtors turnover (days) | 9 | 12 | 12 | 12 | 12 |
| Stock turnover (days) | 166 | 157 | 157 | 157 | 157 |
| Creditors turnover (days) | 16 | 17 | 17 | 17 | 17 |
Source: Company, AmInvestment Bank Bhd estimates
DISCLOSURE AND DISCLAIMER
This report is prepared for information purposes only and it is issued by AmInvestment Bank Berhad (“AmInvestment”) without regard to your individual financial circumstances and objectives. Nothing in this report shall constitute an offer to sell, warranty, representation, recommendation, legal, accounting or tax advice, solicitation or expression of views to influence any one to buy or sell any real estate, securities, stocks, foreign exchange, futures or investment products. AmInvestment recommends that you evaluate a particular investment or strategy based on your individual circumstances and objectives and/or seek financial, legal or other advice on the appropriateness of the particular investment or strategy.
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