PETALING JAYA: MyNews Holdings Bhd may continue to deliver top line growth on opening of more stores in the medium term, according to RHB Research.
The company is targeting some 100 new stores in its financial year 2026 (FY26), with 27 stores already opened so far this year.
Its focus will be on transit hub areas.
The research house expected the company’s South Korean CU convenience stores to continue to be profitable, supported by more aggressive promotions, an improved stock-keeping unit mix and better site selection.
The company’s WHSmith bookstore contribution grew 5.8% quarter-on-quarter and 11.6% year-on-year (y-o-y), and the research house expects this trend to continue, supported by overall tourism momentum.
“But we expect continued cost pressures from higher depreciation and labour expenses amid ongoing expansions, although this should normalise as store productivity improves.
“We expect modest cost savings (circa RM500,000 to RM1mil annually) from the reduction in the sales and services tax from 8% to 6%,” it said.
RHB Research maintained its “buy” call on the counter but cut its FY26 to FY28’s forecast earnings by 12%, 11% and 11%, respectively, on a conservative operating environment.
Its discounted cash flow-derived target price is lowered to 70 sen, valued at a FY26 forward price-to-earnings ratio of 22 times, which is broadly in line with its long-term mean.
Meanwhile, CIMB Research said MyNews’ first quarter (1Q26) financial performance was below its and consensus estimates.
This was mainly due to higher-than-expected operating expenditure (opex), which included the expanded service tax scope covering leasing services and weaker operating leverage.
Its 1Q26 revenue rose 10.5% from the previous year to RM238mil, driven by stronger in-store sales and continued network expansion.
Earnings before tax, interest, depreciation and amortisation margin, however, narrowed 0.7 percentage points y-o-y to 13.4%.
This was due to higher opex due to an increase in administrative expenses, heavier promotional activity, and higher selling and distribution costs.
