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KUALA LUMPUR: MR DIY Group (M) Bhd, the country’s largest initial public offering this year, made its Bursa Malaysia main market debut at RM1.60, which is its offering price.
At 9:03 a.m., the home improvement retailer’s share was trading at RM1.61. 49.78 million shares were made at prices ranging between RM1.50 and RM1.62.
The FBM KLCI rose 2.38 points or 0.16% to 1,497.02. The turnover was 381.90 million shares valued at RM 222.28 thousand. There were 301 winners, 105 losers, and 283 unchanged counters.
MR DIY raised RM1.5bil from the market. Its IPO comprised up to 941.49 million shares, an offer to sell of up to 753.09 million existing shares and a public issue of 188.40 million new shares.
The initial public offering of RM1.5bil was oversubscribed by retail investors, as well as Malaysian and foreign institutional funds 3.91 times.
This public listing raised RM301.4 thousand for the company, of which RM276.1 thousand will be used to pay off bank loans that will save the company RM15.2 thousand per year.
This translates to a market capitalization of approximately RM10bil based on the expanded share capital of the company.
UOB Kay Hian Malaysia Research initiated a “buy” call with a price target of RM2.20, citing an outlook for superior earnings growth.
Its aggressive store expansion and increased market share (thanks to its operational excellence and economies of scale and new avenues of growth) have enabled MR DIY to make four-year profits with a compound annual growth rate (CAGR) in 2017-21F at 20.6%, more than double its peer average of 8.1%.
In the home improvement market amounting to RM7.7bil, MR DIY dominates with a lion share of 29.1%. This is almost double its market share in three years from 15.5% in 2016, demonstrating its reliable and ambitious track record.
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