Strong earnings visibility for Mynews

PETALING JAYA: Analysts are positive about Mynews Holdings Bhd’s prospects on expectations that the group will continue to deliver strong earnings.

The group posted a core net profit of Rm1.8mil in the first quarter of financial year 2024 (1Q24), making its second consecutive profitable quarter.

According to CIMB Securities, the worst is over for the convenience store operator, backed by better earnings visibility stemming from a more sustainable growth strategy.

“We are maintaining our earnings forecasts, projecting Mynews to achieve a net profit of Rm8mil in financial year 2024 (FY24) and rising to Rm31mil by FY26,” the brokerage firm said in a report.

This will be driven by accelerated store openings with a focus on its more profitable Mynews outlets, enhanced gross profit margin through improvements in sales mix and disciplined cost management, it added.

CIMB Securities has upgraded the stock to a “hold” call with a target price (TP) of 49 sen.

Operational-wise, Mynews planned to ramp up new store expansion in FY24 across its five retail brands, namely Mynews, CU, Whsmith, Supervalue and Maru Coffee (new standalone format).

Recall that the group had shared in its 4Q23 briefing that it aimed to open 100 new stores in FY24 compared with over 10 net store additions in FY23, with the majority under the more profitable Mynews brand.

Meanwhile, Maybank Investment Bank (Maybank IB) Research has maintained a “buy” call with an unchanged TP of 62 sen for Mynews.

“With its CU stores and food processing centre reaching break-even levels, positive group earnings growth will become more sustainable, while growing average sales per store also signals an improved consumer appeal towards Mynews stores,” it said.