KUALA LUMPUR: MR DIY Group (M) Bhd’s share price has come under renewed pressure amid concerns over intensifying competition from Chinese e-commerce platforms, especially Pinduoduo.
The counter ended five sen, or 4.55 per cent, lower at RM1.05, after opening at RM1.10 and touching an intraday low of RM1.05.
The latest decline brings MR DIY’s year-to-date losses to 34.4 sen, or 23.8 per cent, while its forward price-to-earnings (PE) ratio has compressed to 15.8 times.
This compares with a valuation of more than 40 times when the company made its Bursa Malaysia debut on October 26, 2020, at an initial public offering (IPO) price of RM1.60 per share.
However, analyst sentiment remains largely positive, with several research houses maintaining ‘Buy’ recommendations on the retailer despite mounting competitive concerns.
CGS International Research believes concerns over the Chinese platform’s competitive threat may be overstated.
The firm described Pinduoduo’s free-shipping strategy as a temporary, subsidy-driven initiative rather than a structural threat to established retailers.
“We view Pinduoduo as a temporary headwind and do not expect free single item shipping to persist following E-Commerce Bill implementation, based on the precedent in Thailand.
“We believe the Malaysian government’s potential introduction of the E-Commerce Bill in the next parliamentary session could benefit Mr DIY and other value retailers,” it said.
CGS International maintained its ‘Add’ recommendation on MR DIY with a target price of RM1.90.