7-Eleven likely to post better earnings in H2
KUALA LUMPUR: With new store growth and cost-efficiency exercises, convenient stores operator 7-Eleven Malaysia Holdings Bhd, is expected to show better earnings for the second half of this year, said a local research house.
“We make no changes to our earnings forecasts, expecting a better second half and maintain our ‘sell’ call, with an unchanged target price of RM1.10, said Maybank Investment Bank Research in a recent note.
The research house noted that 7-Eleven Malaysia Holdings’s first half core net profit made up 44 per cent of its full-year estimates.
“The near- to medium-term focus for 7-Eleven Malaysia Holdings remains to be cost-effective, in line with its 18-month ‘Back-to-Basics’ exercise, which was unveiled at the end of July,” it said.
However, Maybank IB noted that execution on the exercise remains the key.
7-Eleven Malaysia Holdings, through its subsidiary 7-Eleven Malaysia Sdn Bhd, is the owner and operator of 7-Eleven stores in Malaysia.
The company’s current market capitalisation is at RM1.7 billion.
To recap, 7-Eleven Malaysia has opened 64 new stores and this brings the total store count to
2,186 in the first half of this year.
Store openings would have to ramp up into second half to meet its internal target of 150 for 2017 financial year, Maybank IB highlighted.
In July this year, 7-Eleven Malaysia appointed Ho Meng as acting chief executive officer effective August 1, replacing Gary Thomas Brown who had resigned for personal reasons.