Shares of MR DIY Group (M) Bhd jumped 5.65% or 14 sen to RM2.62 in the trading session this morning after the company was listed on the latest 715 shariah-compliant firms issued by the Securities Commission Malaysia.
At 9.42am, the stock recorded a slight gain of RM2.58, still jumping 10 sen or 4.03%.
The company's shares were among the counters that recorded the highest profit this morning apart from seeing 3.38 million shares traded.
AmInvestment Bank Research today recommended a 'buy' and fair value (FV) of RM2.94 against MR DIY.
The research firm added that the fair value is based on the income ratio (PER) 31 times earnings per share (EPS) of 9.5 sen which is projected for the financial year ended 31 December 2022 (FY22).
“We believe that the PE premium valuation is based on strong profit growth, plans to grow its business and its well-known brand. MR DIY is currently traded on FY21 PE 33 times and FY22 PE 27 times, ”said the firm.
AmInvestment is also of the opinion that MR DIY is in a position to profit from the recovery of consumer spending in Malaysia in FY21.
According to the firm, MR DIY's extensive network of branches in the city or countryside, coupled with the reasonable price of its products will help boost sales and customer numbers.
“We expect the MR DIY stock market to reach more than 30% in FY21 compared to 29.1% in FY19. Currently, MR DIY is the largest home appliance retailer in the country with 670 branches.
AmInvestment also predicts MR DIY's net profit margin will increase by 58.9% and 31% to RM454.7 million and RM595.9 million for FY21 and FY22.
