Mynews plans aggressive expansion
PETALING JAYA: Amid the challenging business climate, the country’s largest homegrown convenience store operator Mynews Holdings Bhd is on an aggressive expansion plan to fuel its revenue growth.
While keeping its options open for overseas expansion, the company is still keen to deepen its presence in the country.
CEO Dang Tai Luk (pic) told Starbiz that at this point of time, the company is very domestically focused.
“Being the largest Malaysian homegrown brand, we want to spread our network wider and faster to serve Malaysians better.
“Hopefully, soon MYNEWS stores will become an infrastructure that our communities wish to have in their neighbourhood, just like how we all want to live near a train station.
“We are not shutting the door to overseas prospects.
“Having successfully operated international brand Whsmith in the country and having our own brand MYNEWS taken overseas to Myanmar, we are well equipped to go international,” he said.
For now, Dang said Mynews is using all its resources to grow bigger in Malaysia.
“Convenience retail in Malaysia is still young and we will not stop growing within this young market,” he noted.
Whsmith is a strong travel retail brand. All the Whsmith stores in the country are at the airports.
Mynews and Whsmith UK formed a joint venture (JV) called Whsmith Malaysia Sdn Bhd and each partner holds 50% equity. It is not a franchise structure but a JV and the stores are managed by Mynews, he said.
The company also operates two stores at the Yangon International Airport in Myanmar.
Dang said next year, it is targeting to open more than 100 stores, adding that for this year alone, it had opened 95 new stores.
Barring any unforeseen circumstances, he said it would continue with the expansion trend as long as there was room to grow and consumer demand.
At the moment, the biggest revenue contributor is the food and beverage category.
“Moving forward, Dang said this category would continue to grow stronger, fueled by its large-scale food processing centre (FPC) that feeds the ready-to-eat (RTE) range of products in MYNEWS stores.
“This Rm100mil production facility, which was constructed together with our Japanese partners, has brought RTE food in Malaysia to the level seen in Japan, which is something that we have always wished for.
“It has now come onshore. The quality and standard are truly that of the Japanese level because we brought them to Malaysia to set up the state-of-the-art facility and had them here to manage the production,” he said.
The strategy for 2019 and 2020, Dang added, is to continue to expand the store network size and improve the product mix with RTE food and beverages as the prime category of growth.
At the same time, he said it would embrace technology and retail innovation to improve the stores for a better shopping experience.
“We have taken our business online with MYNEWS Dash in the second-half of 2019, and we will be more aggressive this coming year with this channel,” he said.
On the company’s performance this year, he said Mynews has been delivering positive results and in fact is the most profitable convenience store in the country and top-three most profitable in Asia in terms of profit margins. “Putting aside the short-term and quarterly performance that varies from quarter to quarter, our enterprise value continues to grow and we are ranked the best in enterprise value growth among companies under a billion-ringgit market capitalisation,” he noted.
Alliancedbs Research, which has a “buy” call on the stock with a target price of RM1.60, said the company’s active store expansion and refurbishment would drive topline growth.
Margin could also expand with an improved product mix with an RTE centre coming onstream, it added.
For the third quarter ended July 31, 2019, the company’s net profit was higher at Rm7.45mil on the back of a 35% increase in revenue compared to the similar period a year ago.