Technical tracker - HLIB Retail Research – 5 May 2022 MRDIY: | HLeBroking

Technical tracker - HLIB Retail Research – 5 May 2022

MRDIY: Bottoming up

The China lockdown. The lockdown in China has triggered a sell-down (-15% from YTD high) at MRDIY’s share prices as >70% of its product is sourced from China. Cities such as Ningbo and Guang Zhou, where MRDIY sources most of their product, have posed a potential risk to MRDIY’s supply chain due to the extended restricted lockdowns since March. That being said, we reckon price increase is on the cards for MRDIY to defend its margin as management aims to raise prices and better cost management following the end of the “Harga Kami Tetap Sama” price lock campaign on 31st March.

Expansion plan remains intact. MRDIY’s key strengths are its agility in offering a variety of quality products at affordable prices coupled with its flexibility in product mix to sustain sales and margins, supported by its strong GP margins (~40% in the last three FYs). Following the robust new stores opening in FY21 (+166 stores), the pace of new MRDIY store expansion is set to escalate further to 180 stores in FY22. To recap, the group owns 900 stores locally, with 86% of the store located in east Malaysia in FY21. With the group ramping up its private SKUs coupled with more new stores in the pipeline, this will allow the group to leverage its scale to negotiate for competitive pricing from suppliers, thus maintaining its unchallenged position in the domestic space. Apart from the new revenue stream from new stores opening, MRDIY’s number of transactions and average baskets had also gradually improved following the normalization of store operations.

The recovering retail sales. For FY22, we believe MRDIY is set to capitalize on the recovering retail sales amid the transition of endemicity. To recap, Malaysia’s Feb retail trade value data recorded an impressive 10.2% YoY, while the retail trade volume index 5.4% YoY. Taking cue from the recovering footfall in the mall amid a better spending outlook due to the one-time RM10k EPF withdrawal programme coupled with the Hari-Raya festival, we believe Malaysia 2Q’s retail sales data is likely to recover further, which bodes well for consumer discretion companies such as MRDIY.

Bottoming up. MRDIY is trading near its solid support area of RM3.28-3.35. Further retracements would provide a great opportunity to accumulate to ride on the recovery of the retail segment. Upside targets are RM3.70-4.15. Cut loss at RM 3.15.

Collection range: RM3.38-3.45-3.51

Upside targets: RM3.70-3.95-4.15

Cut loss: RM3.15

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MRDIY：或触底反弹

中国封城。中国的封锁引发了 MRDIY 的股价下跌（从年初至今的高点 -15%），因为其产品的 70% 以上来自中国。城市如：宁波和广州作为MRDIY 大部分产品的采购地，使MRDIY 的供应链面临潜在风险，受限于自 3 月以来延长的限制性封锁。话虽如此，我们认为 MRDIY 可能会“Harga Kami Tetap Sama”价格锁定活动结束后提高其售价以捍卫其利润率，管理层也目标通过提高价格和更好地管理成本来减少该风险。

扩张计划不变。 MRDIY 的主要优势在于其以可承受的价格提供各种优质产品的敏捷性，以及在其强大的 Gross profit 利润率（过去三个财年约为 40%）的支持下，其产品组合的灵活性以维持销售和利润率。继 21 财年强劲的新店开业（+166 家门店）之后，MRDIY新 门店扩张的步伐将在 22 财年进一步升级至 180 家门店。该集团在当地拥有 900 家门店，其中 86% 的门店在 21 财年位于马来西亚东部。随着集团增加其私人 SKUs 以及更多的新店的来临，这将使集团能够利用其庞大的规模与供应商协商具有竞争力的价格，从而保持其在国内无可挑战的地位。除了新店开张带来的新收入来源外，随着门店运营的常态化，MRDIY的成交量和平均购物篮也逐渐提升。

零售业的回暖。在22 财年，我们认为 MRDIY 将随着流行病过渡期间复苏。马来西亚 2 月份的零售贸易价值数据同比增长 10.2%，而零售贸易量指数同比增长 5.4%。除此之外，由于一次性 RM10,000 的 EPF 提款计划加上开斋节，使商场客流量回升，因此我们认为马来西亚第二季度的零售销售数据可能会进一步恢复，这对消费股如MRDIY来说是个好兆头。

触底反弹。 由于MRDIY已 在 RM3.28-3.35 的支撑区域附近交易，因此进一步的回撤将提供一个很好的增持机会。上行目标为 RM3.70-4.15。投资者可将止损点设于RM 3.15。

买入范围：RM3.38-3.45-3.51

上行目标：RM3.70-3.95-4.15

止损：RM3.15

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