KUALA LUMPUR, Nov 21 ― RHB Investment Bank Bhd has maintained its 'buy' call on Mr DIY Group Bhd in anticipation of a stronger fourth quarter (4Q) 2023 and after posting results within expectations.
The group posted a higher net profit of RM123.95 million in the third quarter ended September 30, 2023 (3Q 2023) from RM101.18 million last year, while revenue climbed to RM1.07 billion versus RM966.17 million previously.
In a note today, RHB Investment said it expects MR DIY to see a sequential pick-up in 4Q 2023 sales, boosted by stronger seasonality on the back of the year-end festive season and school holidays.
“In addition, the company has lined up several marketing campaigns to stimulate consumer spending and drive traffic to its stores, taking advantage of the gross profit margin (GPM) expansion,” it said.
Meanwhile, Kenanga Research also maintained its 'outperform' rating on the group due to its impressive GPM exceeding 40 per cent, a testament to MR DIY's advantageous negotiation position with suppliers and benefits derived from economies of scale.
“We like Mr DIY for its vigorous store expansion strategy aimed at broadening its national footprint and the impending initiation of an automated inventory system in 1Q 2024, which could further enhance its operational efficiency,” it added.
At 10.40am, Mr DIY's share price fell five sen to RM1.56 with a total of 3.69 million shares traded. ― Bernama