Mr. DIY Stock drops on profit taking, concerns over China Covid policy

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By Ying Xian Wong

 

Shares of Mr. DIY Group fell on Monday as investors continued to digest last week’s disappointing results and reflected investor concerns over China’s zero-Covid policy.

Transportation costs and rising input costs are weighing on the home improvement retailer’s gross profit margin, in addition to concerns that China’s zero-Covid policy could affect the company’s supply chain and logistics. company, says Lee Chin Hui, Rakuten Trade’s assistant vice president for equity research. .

Shares are down 4.5% at MYR 2.14, taking losses since last week’s earnings release to 7.8%. If this level holds, it would be the biggest one-day loss in the stock this year.

Mr DIY reported a 65% rise in second-quarter net profit on record revenue last Thursday, but fell short of some analysts’ expectations as various costs drove a 0.5% drop in the gross profit margin of the home improvement retailer.

Both Kenanga Investment Bank and Affin Hwang Investment Bank downgraded Mr. DIY’s shares while maintaining target prices of MYR 2.40 and MYR 2.06, respectively.

 

Write to Ying Xian Wong at [email protected]

 

(END) Dow Jones Newswire

August 08, 2022 05:08 ET (09:08 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.

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