PETALING JAYA: Convenience store operator Mynews Holdings Bhd is expecting a seasonally stronger second half (2H) of financial year ending Oct 31, 2026 (FY26) on resilient domestic demand amid a gradual sales recovery as consumers hang back due to inflationary pressures.
CIMB Securities, which has maintained a “hold” call on the stock and a target price (TP) of 51 sen, said there were no major surprises coming from the company’s briefing following the release of its second quarter ended April 30, 2026 (2Q26) showing.
“In our view, the briefing reinforces our cautious stance following the weak 2Q26 results, as sales recovery is likely to be gradual, while inflationary pressures and higher overheads (including higher staff costs and the expanded service tax scope on leasing services) remain key overhangs,” it said.
The company reported a 97% slump in net profit last Thursday to RM55,000 from RM2.3mil on revenue that grew 11.6% to RM226mil in 2Q26 compared to 2Q25.
The brokerage noted that while resilient domestic spending, ready-to-eat-led growth, and disciplined store closures provide some buffer, it believes these positives to be insufficient to drive a near-term re-rating, given current valuations and a more competitive convenience retail landscape. The TP reflects 18 times 2027 price-to-earnings.
“Mynews does not expect any major cost increases from current levels in the upcoming quarters, despite the inflationary backdrop from the US-Iran conflict and higher oil prices,” it said.
It added that despite some increases in logistics, imported parts and construction costs, the company has shared that the overall impact should not be significant.
The company also noted that tourist spending remains soft, based on weaker sales at airport-based outlets while domestic spending has held up and improved slightly month-on-month.
Its management believes the business “is entering a longer seasonally favourable stretch with limited festive disruption, which should support recovery into the second half of FY26 backed by improved sales and higher operating leverage.
The company believes that the cost-benefits of its workforce expansion together with the broader push into automation and artificial intelligence technology, which has impacted margins and resulted in higher overheads in 2Q26, would take time to materialise.
