KUALA LUMPUR (March 26): Shares of MyNews Holdings Bhd climbed on Tuesday to its highest in nearly six months, as investors bet on further upside and earnings growth after the convenience store chain operator remained in the black for the second consecutive quarter.
MyNews rose as much as 12% or six sen to 58 sen in early morning trades, its highest since Oct 3, 2023. The stock was trading at 54.5 sen at 10.00am, after 5.2 million shares changed hands on Bursa Malaysia. In contrast, the consumer sector was a tad lower, while the country’s benchmark index FBM KLCI was down 0.1%.
Analysts said the latest results for the three months ended Jan, 31, 2024 (1QFY2024) reinforced market expectations for stronger earnings ahead, after two straight years of net losses.
With its CU brand’s stores and food processing centre “reaching break-even levels, positive group earnings growth will become more sustainable,” said Maybank Investment Bank, which kept its “buy” call. “Growing average sales per store also signals an improved consumer appeal toward MyNews stores.”
Shares of MyNews have plunged 37% in 2021-2023, as the company grappled with two straight years of net losses due to higher expenses at its food processing centre that offset strong sales at its stores. After staying flat so far this year, the stock is up close to 4% year-to-date, following Tuesday’s gain.
Outlook of nine analysts covering MyNews, however, is still mixed with four “sell” calls and four “buy” calls, while one has a “hold” rating on the stock, according to Bloomberg. The 12-month target price ranges from 31 sen to 89 sen. Consensus estimates call for a RM9.9 million net profit for MyNews’ FY2024 ending Oct 30, 2024.
“We believe the worst is over,” said RHB Investment Bank, which also kept its “buy” call. “The robust expansion of the MyNews brand is poised to further offset narrowing losses from other business units, given its track record of resilient performance despite encountering various challenges.”
MyNews currently operates 619 retail outlets, including 468 myNEWS outlets, 132 CU outlets, and 19 WHSmith outlets.
On its part, MyNews said it aims to expand its five retail brands — myNEWS, CU, WHSmith, SUPERVALUE minimart and MARU Coffee — “at a faster rate” moving ahead.
“Therefore, we expect the sales revenue to grow in parallel with the growing store network and ongoing efforts in increasing the in-store sales,” MyNews said. All in all, the company said it expects its performance to continue to improve.