The research house said on Tuesday that this was despite it viewing the group’s development of its ready-to-eat (RTE) fresh food and bakery products positively.
It maintained its earnings forecasts, Hold call and end-2019 target price of RM1.50 on the counter.
It said a recent meeting with the management revealed that the group has moved the construction of its food processing facility from Rawang to its corporate office in Kota Damansara.
“The facility is on track for completion and will be fully operational by Feb 2019, with food products rolling out by March 2019,” it said.
For the group’s RTE fresh food and bakery products, it said Mynews has indicated that it would outsource its logistics to an experienced third-party provider which would allow the group to transport temperature controlled and short shelf life span products given that they would require more delicate handling.
“Also, we gather that the group is on track to meet its yearly target of opening 90 stores in FY18 and is aiming to open another 90 stores in FY19.
“We understand that the group would have no difficulty in securing locations for its stores, and it believes that there is still plenty of room for penetration in the domestic convenience store space,” it said.