MyNEWS’ sales growth momentum to continue
KOTA KINABALU: MyNEWS Holdings Bhd’s (MyNEWS) sales growth momentum has been projected by analysts to continue into the second half of financial year 2018 (2HFY18) but others expect the earnings momentum for FY18 to be subdued.
The research arm of Maybank Investment Bank Bhd (Maybank IB Research) expected sales growth momentum to continue into 2HFY18 on new store openings and overall better consumer demand.
“With the zero-rating of the Goods and Services Tax (GST) starting June 1, 2018, we believe that this will help drive MyNEWS’s sales in the near term as well,” Maybank IB Research said.
“Elsewhere, year to date (YTD) 1HFY18, MyNEWS has opened 29 stores (net) and this brings total store count to 385.
It added that store openings would have to be ramped up to meet MyNEWS’ internal target of 90 in FY18, compared to 62 in FY17. The research firm has penciled in 75 store openings for FY18. “In the near term, we understand that MyNEWS looks to maintain its targeted geographical mix of 80:20 between central and other regions in Peninsular Malaysia.”
However, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) expected the earnings momentum to be subdued by the higher staff and rental costs during this expansion period as well as start-up costs from the commissioning of in-house food-processing facility.
Kenanga Research noted that the in-house food-processing facility is expected to be completed by end-current year 2018 (CY18), supported by MyNEWS’ joint venture (JV) companies, MyNews Kineya Sdn Bhd and MyNews Ryoyupan Sdn Bhd.
In a filing on Bursa Malaysia, MyNEWS announced that for the six months period ended April 30, 2018, revenue was at RM184.31 million, an increase of RM28.81 million or 18.5 per cent over its 2017’s corresponding period of RM155.49 million.
“Its gross profit margin was 38.1 per cent and profit before tax was RM16.58 million compared to the corresponding period of 2017 of 37 per cent and RM15.64 million respectively,” the filing read.