KGI Securities (Thailand) maintains a positive outlook for MR. D.I.Y. Holding (Thailand) Public Company Limited (SET: MRDIYT), projecting sustained earnings growth in the second half of 2026. The company expects consumer spending and sentiment to improve during this period, helped by potentially lower inflation fueled by declining oil prices.
Notably, same-store sales growth turned positive in July, and management expects this trend to continue. Store expansion remains a key focus, with 210 new outlets planned for 2026. The company’s ‘Always Low Prices’ strategy may see increased promotional activity to drive brand awareness and foot traffic.
Although MRDIYT targets a gross margin of 51-52% (compared to 52% in the first half), KGI believes the company can afford some margin flexibility to support sales volumes.
Moreover, the positive impact of new store openings, reduced financing costs after debt repayment, and stabilized losses from the KKV business should outweigh any potential margin softness, supporting earnings growth both year-on-year and half-on-half. First-half 2026 earnings accounted for 48% of KGI’s full-year forecast, so the expected improvement in 2H26 is already reflected in the analyst’s estimates.
Looking ahead, store expansion is anticipated to be the main growth driver through 2027-2028, with assumptions of adding 190 new stores in 2027 and 160 in 2028, close to the company’s guidance of about 200 new stores per year.
MRDIYT’s track record supports this aggressive expansion, having averaged 180 new stores annually over the past four years. While there may be limited room for gross margin improvement due to the company’s value positioning, absolute gross profit should rise in line with sales growth as store coverage expands.
As a result, KGI has updated its target price for MRDIYT to THB 11.00 per share for end-2027, a level reflecting a 19x price-to-earnings ratio. With the share price recently underperforming, this target implies a 12% upside from the recent closing price. The stock rating is revised to ‘Outperform’ due to MRDIYT’s resilient expansion strategy and competitive positioning in the market.
