KUALA LUMPUR: Mr DIY Group (M) Bhd's share price fell to a three-month low in the morning session after its third quarter (3Q) financial year 2024 results came in below expectations.
The company's share price hit a day's low of RM1.90 a share before closing at RM1.93 a share at midday break.
Hong Leong Investment Bank Bhd (HLIB Research) lowered its target price for the stock to RM2.60, down from RM2.74, after adjusting for a more conservative earnings forecast for the coming fiscal years.
Its maintained its "Buy" call on the stock.
HLIB Research said Mr DIY reported a core net profit of RM423.3 million for the first nine months of 2024, a modest 5 per cent increase year-on-year (YoY), falling below analysts' estimates due to slower top-line growth.
HLIB Research said it was impacted by weaker consumer sentiment and the absence of festive spending, alongside challenges from the recent removal of diesel subsidies.
Mr DIY's growth strategy remains aggressive, with plans to open 180 stores this year and a target increase to 190 in 2025, including further expansion of its large-format KKV stores.
"We remain optimistic with the group's strategy of store expansion to defend its market share as the leading home improvement retailer," HLIB noted in its analysis.
It said despite the tempered growth, Mr DIY declared a 1 sen dividend per share for the quarter, marking a 78 per cent payout ratio—well above its typical range of 50 per cent to 65 per cent —which underscores management's confidence in the group's long-term prospects.