u/Western_Break7294

I don’t know about you guys, but I play golf. Started during Covid like half of Malaysia, never stopped. And if you play golf here, you know MST.

Random thing I noticed recently: their stores feel emptier than before. So I checked the share price out of curiosity and… yeah. MST Golf is down more than 80% since its IPO in 2023. From 81 sen to around 14 sen today.

My first reaction was, “Wah, these guys expanded way too fast and it caught up with them.”

And to be fair, that’s not wrong. They went on a store-opening spree right after listing (indoor golf centres, new formats, Indonesia, and now Thailand).

Revenue has actually been shrinking over the last two years, and they took a chunky impairment charge in FY2025, basically writing down underperforming outlets.

But then I looked into their history a bit, and it made me reconsider the idea that they’re simply bad businessmen.

Founded in 1989. They survived the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis, while continuing to expand.

They’re the largest golf retailer in Malaysia (around 51% of all golf equipment imported into Malaysia goes through them) and are largest in Singapore too.

Today, the founders still retain 55% of the company through their primary investment vehicle, All Sportz Sdn Bhd, and controlling over 62% when including direct and family holdings.

And honestly, this isn’t even a uniquely Malaysian problem.

Look at Topgolf Callaway Brands in the US. Same story. They bet big that the post-Covid golf boom would continue. It didn’t. They’re now in the middle of separating Topgolf from their profitable golf equipment business so the “good business” isn’t dragged down by the “expansion bet.” They’ve been trying to execute that split since September 2024.

So MST isn’t alone here. It feels like the whole industry overestimated how long the Covid golf boom would last.

So… what happens from here? (And can I make money off this? 😂)

If MST is actually run by people who simply overextended—not people who don’t know what they’re doing—then the logical next step is similar to what Callaway is trying to do: stop trying to be everywhere, consolidate around the stores that work, and let the stronger outlets carry the group.

They’re actually already starting to do this. Management has slowed expansion and shifted towards improving what they already have — rationalising weaker outlets, upgrading key Malaysian stores, and being more selective with regional expansion.

Recent impairment charge was painful, but I see it as management admitting that some bets didn’t work out rather than pretending everything is fine. The question now is whether they can be disciplined enough to keep cutting what doesn’t work and focus on the stores that do. Personally, I think they could still go further and faster.

So what’s at stake? Well here’s a back-of-the-envelope “what if they execute well?” scenario:

Current:
🇲🇾 Malaysia: 37 stores (~RM5.3m/store)
🇸🇬 Singapore: 7 stores (~RM6.4m/store)
🇮🇩 Indonesia: 7 stores (~RM5.2m/store)
🇹🇭 Thailand: 0 stores

My scenario:
🇲🇾 Malaysia: 30 stores × RM6.5m = RM195m
🇸🇬 Singapore: 8 stores × RM6.5m = RM52m
🇮🇩 Indonesia: 8 stores × RM6.5m = RM52m
🇹🇭 Thailand: 5 stores × RM6.5m = RM33m

Total: 51 stores → ~RM330m revenue

Assuming:
• Precovid net margin (~6.8%) → ~RM22m net profit
• 820.9m shares → ~2.7 sen EPS
• 10× P/E → ~RM0.27/share
• 30% payout ratio (management's stated policy)
• Dividend ≈ 0.8 sen/share
• At current share price (~14 sen)
• Dividend yield ≈ 5.7%

For context, RM0.27 is still well below their RM0.81 IPO price, so this isn’t a moonshot scenario. It’s simply what the business might be worth if management gets the fundamentals right without needing another golf boom.

But will this happen? I honestly don’t know. This isnt a prediction.

My takeaway is simply that MST looks like a genuinely good Malaysian business that’s currently buried under the consequences of expanding too aggressively. I’m a little proud that it’s a home-grown company, and I’d like to see it become consistently profitable again. For now, I’m just watching.

I’ll be paying attention to what management says, how the quarterly numbers evolve, whether expansion genuinely slows, whether weaker stores continue to be rationalised, and whether margins start recovering.

If the evidence starts pointing in the right direction, maybe I’ll buy some shares.

Not there yet.

Not financial advice. Just an amateur thinking out loud. Please do your own homework before investing in anything—including this.

Comment if you are interested to follow this story. Ill write a follow up if there’s interest.

Im long, i used AI to write this, and this is not a financial advice. Do your own research.

Dufu?

Dufu makes the small precision metal parts that hold a hard drive together — mainly the spacers and clamps that sit between the spinning disks (the “platters”). It sells almost all of this to Seagate, Western Digital and Toshiba. By its own estimate, it makes 20–30% of the world’s HDD disk spacers — a top-three player in a niche most people have never heard of.

Whats the story?

The number of hard drives shipped each year has fallen about 74% over the last decade. But Dufu doesn’t get paid per drive. It gets paid per platter, because its parts go in between the platters.
And the drives have been getting fatter. A high-capacity drive used to hold around 9 platters. Today’s hold 10–11. Western Digital has just laid out a roadmap to 14 platters per drive.

The mechanics are almost one-for-one: an 11-platter drive needs 10 spacers stacked between the disks; a 14-platter drive needs 13. More platters, more spacers, every single time — and Dufu makes a fifth to a third of them.

That’s why Dufu’s revenue went up while drive shipments fell — from RM178m in 2015 to RM277m in 2025. Fewer drives, far more parts inside each one.

So.. to the moon?

This cycle’s drives are fatter than the last peak’s. Last time Dufu’s earnings peaked (2021), drives held about 9 platters. This cycle they hold 11, heading to 14. That alone is a big step up in parts per drive.
There may be a materials kicker too. Disk spacers can be made from stainless steel, titanium or engineering plastics, and the lighter, stiffer materials become more useful as you pack more disks into the same height. If the mix shifts toward higher-spec parts, that lifts the price per piece. I wouldn’t bank on it, but it’s a free option on top of the platter count.

The last peak was RM74m. This one can beat it.

In 2021, Dufu earned RM74m net profit — about RM0.14 per share, at a 21% margin. That was on thinner drives and a smaller order book.

This cycle has more platters per drive and order books that are already full: WD has said it’s sold out for all of 2026 and signed multi-year supply deals into 2028. The demand is locked. The question is just how much Dufu earns on it.

A reasonable optimistic peak this cycle:
Revenue ~RM500m (above the old RM357m record — more content per drive, full books)
Net margin ~21% (right in line with past peaks, assuming the currency normalizes) = ~RM105m net profit, about RM0.20 per share.

That’s above the 2021 peak, not just a repeat of it. And it doesn’t need heroics — it’s roughly the same ~17–18% return on assets Dufu already earned last cycle, just on a bigger, more-invested asset base.

So…. to the moon???

Hopefully la. Where it can go:

Sober case: a normal 16–18x multiple on ~RM0.20 peak earnings → RM3.20–3.60

Exuberant case: the market routinely pays cycle-high multiples on cycle-high earnings — it paid north of 30x at the 2021 top. Do that again on RM0.20 and you’re at RM6 or more, past the old RM4.82 high.

I’m happy to bet that the market gets exuberant near the peak, because it usually does. But I don’t need it to. Even the sober case is a 30% gain. The exuberance is the upside, not the thesis.

Ok la.. i come clean ok?

I looked at this a while back. Dufu makes a fifth to a third of the world’s hard-drive disk spacers. Drives are getting fatter — more platters, more spacers per drive — and the order book is full into 2028. Today’s earnings are masked by a strong ringgit, so i bought at RM1.99, paying only ~10x what this cycle could earn at its peak. Sober case RM3.20–3.60; if the market gets excited like it did in 2021, RM6+. So im long.

Right now, im still long, looking at RM3.20 - RM3.60 as a first stop. I think the next earnings around end-July should show continued profit acceleration, bringing in more exuberance. Im sharing this because I want to encourage that la, because Im already long. But that doesn’t mean this is the top. Possibly far from it.