KUALA LUMPUR: Maybank Investment Bank Research's says its earnings forecasts for Mynews Holdings Bhd are largely unchanged despite plans to introduce new F&B products as a prelude to the roll-out of its ready-to-eat (RTE) facility.
Mynews is launching new F&B products under the Maru Kafe brand for its new stores to remain competitive against its peers.
The retailer hopes to increase its average baske size per customer by 50 sen to 60 sen from RM6.12. Mynews has introduced Maru Kafe to one store in Avenue K and will extend it to 50 stores from mid-Oct 2018 onwards.
According to Maybank Investment, Mynews is likely to fall short of its target of 90 new stores in FY18, having opened 77 new stores year to date.
The commencement date for its food processing facility has also been delayed to end-1QVY19 while it targets to roll out its RTE and bakery F&B products to 150 stores within the Klang Valley in 2019.
With regards to the expected rise in minimum wage in FY19-FY20, the research house said Mynews's overall staff cost may only rise by about RM600,000 per annum due to a majority of its 1,600-1,700 staff force already recieving higher than the minimum wage.
Meanwhile, 32% of the workforce cmprise foreign workers.
"Hence, factoring in higher wage costs, offset by better revenue contribution from our higher FY18 store opening est. of 85 stores (from 75), our FY18-FY20E earnings are largely unchanged."
Maybank Investment maintained its hold call on the counter with an unchanged target price of RM1.44.