PETALING JAYA: The CU convenience stores in Malaysia, operated by MyNews Holdings Bhd, is expected to turn profitable in the ongoing financial year ending Oct 31, 2026 (FY26).
In a note to clients, CGS International (CGSI) Research said it believes CU broke even for the second consecutive month as its tax rate for the fourth quarter of FY25 (4Q25) came in lower than expected at 16%.
“Hence, we project reduced tax expenses in FY26 to FY27 and expect CU to turn profitable in FY26, with RM51mil of unrecognised tax losses as at end-FY24.”
Aside from CU stores, the group also operates other brands of convenience stores such as myNEWS, myNEWS Supervalue and the newly launched Maru Café.
It is noteworthy that the new Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani owns about a 20% stake in MyNews via Jag Capital Holdings Sdn Bhd.
CGSI Research pointed out that MyNews’ revenue in 4Q25 rose by 10.2% year-on-year (y-o-y) due to an improvement in same-store sales growth and new store additions.
“We find its revenue growth particularly impressive, given the risk of weak revenue growth from consumers pivoting their spending to retail outlets like 99 SpeedMart and Lotus’s that carry products under the MyKasih programme, which convenience stores are not part of.”
MyNews saw net additions of four stores in 4Q25, bringing FY25 net additions to 63 stores, well below its target of opening about 100 stores in FY25.
“We think it will be able to open about 60 net new stores in FY26, which should help to lift revenue further in FY26,” stated CGSI Research.
As for its core net profit in 4Q25, MyNews reported a 40.1% y-o-y jump to RM3.8mil, bringing FY25 core net profit to RM17.8mil.
Despite FY25 core net profit coming in almost double of FY24, CGSI Research said it was below expectations at 90% of its FY25 estimates. Compared to the Bloomberg consensus forecast, the core net profit in FY25 stood at 93%.
The earnings miss stemmed from lower-than-expected revenue at 98% of CGSI Research’s expectation, leading to lower-than-expected earnings due to a strong leverage effect.
“However, we believe MyNews’ core earnings will meet our FY26 expectations, gaining pace to surpass pre-Covid-19 highs of RM24mil and leading to a rerating in its share price on the back of robust consumer demand and strong growth in tourism.
“For 2026, CGSI Research’s economics team expects private consumption growth in Malaysia to expand 4.8% y-o-y.”
Looking ahead, the research house remains upbeat on MyNews as it kept its “add” call on the stock unchanged.
The RM1 per share target price was also retained as CGSI Research is positive on MyNews’ earnings recovery trajectory, forecasting a FY24 to FY27 core net profit compounded annual growth rate of 60%.
The stock closed at 55 sen a share on Jan 2.
“As investors come to appreciate the sustainability of its earnings recovery and likely CU turnaround, MyNews’ valuations, which are currently heavily discounted at the 2026 price-to-earnings ratio of 12.2 times relative to peers’ 17 to 23 times, should re-rate with stronger earnings delivery, in our view.
“Downside risks include a sharp increase in operating costs and higher-than-expected wastages,” it said.
