MR DIY closes at RM1.05 as e-commerce competition concerns weigh
The retailer's year-to-date decline reached 23.8 per cent, but several research houses retained Buy recommendations.
Shares in MR DIY Group (M) Bhd finished at RM1.05, down five sen or 4.55 per cent, amid concerns about growing competition from Chinese e-commerce businesses, particularly Pinduoduo. Trading began at RM1.10, and the closing price matched the session's low.
The stock has lost 34.4 sen, or 23.8 per cent, since the start of the year. Its forward price-to-earnings ratio is now 15.8 times, against more than 40 times at its Bursa Malaysia debut on October 26, 2020. The initial public offering was priced at RM1.60 a share.
Several research houses have kept their Buy calls despite the competitive concerns. CGS International Research retained an Add recommendation and a RM1.90 target price, saying the threat from Pinduoduo may have been overstated.
CGS said subsidies underpin Pinduoduo's free-shipping approach and viewed it as a temporary challenge, not a structural threat to established retailers. Pointing to Thailand's experience, it said free delivery for individual items was unlikely to last after implementation of an E-Commerce Bill.
The research firm also said MR DIY and other value retailers could benefit if the Malaysian government introduces the E-Commerce Bill during the next parliamentary session.
