KUALA LUMPUR: Mr D.I.Y. Group (M) Bhd’s nine months’ revenue and core net profit, which grew 33.9 per cent year-on-year (Y-o-Y) and 29.6 per cent Y-o-Y to RM2.4 billion and RM295.8 million respectively, were below expectations, Affin Hwang Capital said.
For the third quarter, Mr D.I.Y.’s revenue grew 3.8 per cent Y-o-Y mainly attributable to new stores opening for a total of 841 stores (up 22 per per cent Y-o-Y).
“However, its Q3 2021 core net profit declined 20.6 per cent Y-o-Y due to higher operating expenses as a result of lower revenue per store from lower footfall caused by Covid-19 movement restrictions.
“The gross margin fell by 1.2 percentage points to 41.2 per cent due to some input and freight cost pressures as well as margin dilution from Mr DOLLAR outlets contribution,” Affin Hwang said in a note today.
On a Q-o-Q basis, revenue and core net profit grew by 1.1 per cent and 10.1 per cent respectively on improved consumer sentiment in the latter half of the quarter as movement restrictions were gradually relaxed from August onwards.
Affin Hwang said Mr D.I.Y. opened 14 stores in Q3 2021 (versus 39 stores in Q2 2021).
Despite the lower store opening in Q3, Mr D.I.Y. is maintaining its target of opening 175 stores in 2021.
The company has declared a dividend per share (DPS) of 65 sen for the quarter, bringing the total nine month’s DPS to RM2.05.
Affin Hwang has lowered Mr D.I.Y.’s FY21-23 earnings per share by 0.6-15.3 per cent, in view of the weaker-than-expected Q3 2021 results on a slower-than-expected lifting of Covid-19 movement restrictions and weaker-than-expected margins.
For FY22, the firm has raised its effective tax rate assumption from 25 per cent to 29 per cent taking into account the potential impact of the one-off prosperity tax introduced in 202 Budget.
It has maintained its “Hold” call on Mr D.I.Y. with a lower target price of RM3.39 from RM3.71 previously.
Source: New Straits Times
