One World Hotel, Petaling Jaya
06 October 2020
MR.DIY Raises RM1.5B in Malaysia’s Biggest IPO of 2020
PETALING JAYA, 6 OCTOBER 2020 – MR D.I.Y. Group (M) Berhad (“MR.DIY” or the “Company”), Malaysia’s largest home improvement retailer, will raise approximately RM1.5 billion (USD$362 million1) in Malaysia’s largest Initial Public Offering (“IPO”) of the year, drawing support from some of the world’s notable investors, including Aberdeen Standard, AIA, BlackRock, FIL Investment Management, JPMorgan Asset Management and Pictet Asset Management.  The cornerstone investors make up 76% of the institutional offering tranche (excluding shares offered to Bumiputera investors approved by the Ministry of International Trade & Industry, Malaysia (“MITI”)). 
 
MR.DIY, founded in 2005, has a strong track record of growing its store network with plans to open an aggregate of approximately 307 new stores across all its brands in 2020 and 2021, expanding its portfolio by approximately 52% from 593 stores as at 31 December 2019, as it seeks to expand its presence in the Malaysian home improvement market. The Malaysian home improvement market is expected to be worth RM12.5 billion by 2024, growing at a compounded annual growth rate (“CAGR”) from 2019 to 2024 of 10.2%  (higher than the retail segment of 5.7% over the same period.) MR.DIY is a market leader with an estimated 29.1% market share in the country in 2019 according to Frost & Sullivan.


Dato’ Azlam Shah Bin Alias, the Independent Non-Executive Chairman of MR.DIY said, “Our customers have continued to support our business, which is a reflection of our winning formula – a broad product mix, an accessible price point and high-growth retail locales. It has enabled us to be uniquely resilient and steadfastly profitable in an extraordinarily challenging market.”
 
Based on its unaudited consolidated management accounts2, MR.DIY Group posted an aggregate revenue of RM465.6 million for the two months of May and June 2020 in the post-Movement Control Order (MCO) period, approximately 12.0% higher than the aggregate revenue of RM416.1 million recorded in the two months of January and February 2020.
 
MR.DIY’s debut on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) is especially attractive for global and domestic fund managers alike as it offers a unique opportunity to participate in a financially strong company with a market-leading position, offering a double-digit growth profile. 
 
Post-listing, MR.DIY has adopted a dividend policy that targets to return 40.0% of its earnings to shareholders.
 
“In a capital market starved of quality issues offering a more-than-decent growth and return profile, MR.DIY stands out among its peers both on a domestic and international basis,” added Dato’ Azlam. Some of Malaysia’s largest funds such as Affin Hwang, AIA, Aberdeen, Eastspring, Hong Leong Assurance and Hong Leong Asset Management have joined in supporting MR.DIY’s IPO.
 
MR.DIY offers products in categories including hardware, household and furnishing, electrical, stationery & sports equipment, and others (including toys, car accessories, jewellery, cosmetics, food and beverage items). In each store, MR.DIY offers a wide selection of more than 16,600 types of products with an attractive price-to-quality value, consistent with its promise of 'Always Low Prices'.

Since inception, MR.DIY Group has been reporting strong financial growth. From the financial year ended 31 December (“FYE”) 2017 to FYE 2019, the Company’s CAGR for revenue was 36.1% from RM1.23 billion to RM2.28 billion and its net profit for the financial year increased at a CAGR of 23.0% from RM210.0 million to RM317.6 million.
 
The launch of MR.DIY’s IPO prospectus today at One World Hotel, Petaling Jaya is in conjunction with MR.DIY’s listing on the Main Market of Bursa Malaysia. The IPO, of up to 941.49 million MR.DIY shares, comprises of an offer for sale of up to 753.09 million existing shares and a public issue of 188.40 million new shares.
 
MR.DIY will raise RM1.5 billion from the market based on the initial retail price of RM1.60 per IPO share. This translates to a market capitalisation of approximately RM10.0 billion based on the enlarged share capital of the Company, making it the biggest Malaysian IPO in 2020 to date. This also places the Company amongst the top 40 largest listed companies by market capitalisation in Malaysia upon listing.
 
The 941.49 million shares, which represent 15% of the enlarged issued 6.28 billion shares, will be allocated in the following manner:
 
  • A retail offering of 161.53 million shares of which 125.53 million shares will be available for application by the Malaysian public and 36.00 million shares are reserved for application by directors, employees and persons who have contributed to the success of the Group.
 
  • An institutional offering of up to 779.96 million shares of which 470.75 million shares are allocated to Bumiputera investors approved by the MITI. The remaining 309.21 million shares will be to Malaysian institutional and selected investors (other than Bumiputera investors approved by the MITI), foreign institutional/selected investors outside the United States and qualified institutional buyers in the United States.
 
The IPO will raise approximately RM301.4 million from the public issue of 188.4 million new shares for the Company of which RM276.1 million will be for the repayment of bank borrowings. The remaining RM25.3 million will be to defray the estimated listing expenses. The repayment of the borrowings will give rise to with an interest savings of approximately RM15.2 million per annum.
 
During the launch, MR.DIY’s Independent Non-Executive Chairman Dato’ Azlam Shah Bin Alias said, “We grew from one store to 670 stores in Malaysia, with another 4 in Brunei. All anchored on the promise of “Always Low Prices”. We are now the largest home improvement retailer in Malaysia.”

“Together, MR.DIY, MR.TOY and MR.DOLLAR are well positioned to meet the needs of the rakyat across the home improvement, toys, food & beverage and household essentials segments.  Truly, a line-up of brands for every Malaysian. Despite the challenges of the pandemic, we have opened 70 MR.DIY stores thus far this year, and well on track to meet these targets.” he added.
 
Jefferi M. Hashim, Chief Executive Officer of CIMB Investment Bank said, “MR.DIY’s business model has remained resilient, recording continued growth despite the challenging economic and market conditions. The company has an exciting growth story and we are pleased to assist the participation of the investing community in the company’s next phase. It has been a privilege for us to work with MR.DIY on this IPO and we look forward to continue to be part of its promising journey post listing.”
 
Ami Moris, Chief Executive Officer of Maybank Kim Eng Group said, “In line with Maybank’s mission of Humanising Financial Services, we are proud to be able to bring to the investing community an IPO that delivers on the principle of social inclusion. We look forward to leveraging our regional footprint to bring this great Malaysian-built company, MR.DIY, to all corners of ASEAN.”
 
Robert Huray, CEO of RHB Investment Bank said, “On behalf of RHB Investment Bank, I would like to congratulate MR.DIY on this momentous milestone towards its listing on the Main Market. It is an honour and privilege for us to work on the IPO of one of Malaysia’s leading home improvement brands that continues to build a strong presence nationwide. We wish MR.DIY and its management team continued success, and we look forward to further developing our long-term partnership.”
 
For MR.DIY’s listing exercise, CIMB Investment Bank and Maybank Investment Bank are the joint principal advisers, joint global coordinators, joint bookrunners, joint managing underwriters and joint underwriters. RHB Investment Bank is the joint global coordinator, joint bookrunner, joint managing underwriter and joint underwriter.
 
Credit Suisse Securities (Malaysia) Sdn Bhd, Credit Suisse (Singapore) Limited, JPMorgan Securities (Malaysia) Sdn Bhd and J.P. Morgan Securities plc are joint global coordinators and joint bookrunners. UBS Securities Malaysia Sdn Bhd and UBS AG, Singapore branch act as joint bookrunner for this listing exercise. AmInvestment Bank, Hong Leong Investment Bank and Kenanga Investment Bank are the joint underwriters for this listing exercise.




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[1] At the exchange rate of approximately RM4.14:US$1.

[2] MR.DIY's unaudited consolidated management accounts have not been reviewed, confirmed or audited by its auditors or reporting accountants, and results presented by such unaudited financial information therefore remain subject to change and may differ from its actual results had such financial information been audited or reviewed.
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