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MR DIY Pre-IPO - Peer Comparison - Small stores with dominant market share

Overall, the peer comparison analysis reaffirms our bullish view of Mr DIY. Its dominant market share is well ahead of any home improvement competitors in Malaysia. In comparison to other leaders in respective markets, Mr DIY enjoys a wide moat whereas the latter group has more competitors to deal with. The dominant market share also allows Mr DIY to ride the home improvement industry tailwind and continue to capture a larger share in the next few years as competitors will have to play catch up.

Mr DIY also operates at higher gross and PATMI margins than peers which suggests that the company has better management of costs. This could stem from the fact that Mr DIY operates far smaller stores than its peers and perhaps the smaller format is a more superior model as we see that peers seemed to be moving in the direction of opening more small format stores.

Setting up smaller stores also meant that transaction size is smaller as stores will need to sell smaller and less bulky items which improves inventory turnover and to certain extent, increases the store network, potentially capture market share quicker with lower capex.