Analysts positive on Mynews’ FPC
KUALA LUMPUR: Mynews Holdings Bhd’s (Mynews) food processing centre (FPC) generally garnered positive views from analysts, with the FPC utilisation expected to rise as demand flows through newly opened stores in the financial year 2020 (FY20).
Following a visit to Mynews’ FPC, Maybank Investment Bank Bhd’s research team (Maybank IB Research) observed efficiencies throughout the centre, with its operations currently at 40 per cent utilisation rate.
“The ramp up in plant utilisation has been at a controlled pace and we believe that demand for its ready-to-eat (RTE) products should grow in tandem with new store growth in FY20,” it opined.
It expected Mynews’ FPC utilisation to rise as demand flows through newly opened stores in FY20.
“Food wastages are still at circa 25 per cent but it has greatly improved from a higher 40 per cent when the FPC was first launched. Mynews targets to bring its wastage rate down to circa 15 per cent. Note that its bakery plant operations have qualified for an investment tax allowance (ITA) to be used within five years once the plant turns profitable while Mynews is still in the process of applying for ITA for its RTE plant,” it said.
Meanwhile, AmInvestment Bank Bhd’s research team (AmInvestment) noted that the group remained committed to increase its network expansion by around 80 to 100 stores in FY20F in order to fully realise its FPC capabilities.
“We assume in our forecast the number of outlets to surpass 600 in FY20F (from 498 in 9MFY19) with revenue growing by 23 per cent,” it said.
“We like Mynews for its franchise opportunities arising from the full autonomy of its myNews.com brand name, and growth potential from its FPC offering RTE and bakery products,” it added.
Both AmInvestment and Maybank IB Research maintained their ‘buy’ call on Mynews.