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Growth has been impressive as MD has more than doubled its revenue and store count since 2016. Key operating metrics also show that growth is well supported by fundamentals as SSSG growth has been at a modest 4.6% as of 9M 2019 and value of each transactions have been consistently growing.
That said, the IPO will do little to accelerate or help with MD’s expansion plan. It is really just a partial exit for existing shareholders. In fact, proceeds raised will be technically used to finance its 2019 dividend pull out and will not be put towards expanding store network as its operating cashflow is more than enough to finance it.
Other gripes also include the fact that MD only holds interest in the Malaysia and Brunei operations while the founder and his family are still running the MR. D.I.Y. operations in other countries such as Thailand, Indonesia, Singapore, and Philippines.
MR DIY Pre-IPO - Largest home improvement retailer in Malaysia
MR. D.I.Y. (MD) is looking to raise US$500m in its upcoming IPO in Malaysia. The company is the largest home improvement retailer in Malaysia with a market share of about 25.4% in 2018 based on revenue.Growth has been impressive as MD has more than doubled its revenue and store count since 2016. Key operating metrics also show that growth is well supported by fundamentals as SSSG growth has been at a modest 4.6% as of 9M 2019 and value of each transactions have been consistently growing.
That said, the IPO will do little to accelerate or help with MD’s expansion plan. It is really just a partial exit for existing shareholders. In fact, proceeds raised will be technically used to finance its 2019 dividend pull out and will not be put towards expanding store network as its operating cashflow is more than enough to finance it.
Other gripes also include the fact that MD only holds interest in the Malaysia and Brunei operations while the founder and his family are still running the MR. D.I.Y. operations in other countries such as Thailand, Indonesia, Singapore, and Philippines.
Underlying
MR DIY
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Zhen Zhou Toh
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