After days of underwhelming performance, shares of MR DIY Group Bhd returned to 'green' following its fourth quarter earnings report.
MR DIY jumped 9 sen or 5.14% to RM1.84 as of 3pm, with a market value of RM17.35 billion.
The company reported an increase in net profit of RM136.08 million in the fourth quarter from RM134.55 million a year ago, bringing full 2022 profit to RM472.95 million.
The main contributor to the increase was positive new store sales which increased 20% year-on-year to 1,080 stores.
It is said to be aiming to open another 180 new stores this year which will bring its total to 1,200.
Nevertheless, profit after tax was seen to be affected due to the one-off prosperity corporate tax of RM10.2 million on subsidiaries with taxable income exceeding RM100 million.
This led analysts to reduce their price targets, with Kenanga lowering TP to RM1.85 from RM2.00 but maintaining a 'market perform' recommendation for MR DIY.
This follows caution over inflation concerns that may affect margins due to increased operating costs.
In addition, RHB Research also maintained its 'buy' recommendation and reduced its price target to RM2.48 from RM2.62 per share after lowering its earnings forecast for 2023 and 2024 by 2%-7%.
In contrast to Maybank Investment Bank which set its 'buy' rating with TP unchanged at RM2.40 per share following positive expectations for MR DIY in 2023 with the addition of new stores and the absence of prosperity tax.
