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According to Nielsen, Mynews has been continuously gaining market share, with sales growing despite the overall decline in the convenience store sector.
Keep BUY, with new MYR0.81 TP from MYR0.68, 27% upside and c.2% FY25F (Oct) yield. Mynews' current valuation of 15.9x FY25F P/E appears attractive compared to its convenience store (CVS) peers. We forecast FY25 net profit to reach pre-pandemic levels of MYR28m once CU is no longer a drag on earnings. With the worst likely behind, the end of CU's gestation period, progressive contributions from Mynews, and the turnaround of its food processing centre (FPC) should drive a re-rating of the stock.
Opening of new stores is ongoing while the existing
stores are improved and revamped when and where necessary. Product mix and services are continually
improved to meet the market trend and customers’ demand. With these efforts, the Group expects the
sales revenue to continue its upward trend. Consequently, the production volume of the FPC will increase
as well, driven by the increasing sales at the retail front.
Reiterate Add with higher GGM-based TP of RM1.18
We reiterate our Add call on Mynews, as we are positive on its earnings recovery trajectory with a higher GGM-based TP of RM1.18 (ROE 13.7%, COE 7%, LT growth 4%) after we raise our core net profit forecasts. We see a sharp recovery in Mynews' net profits taking its CY26F P/E down to a deeply discounted 12.9x relative to peers at 17-23x. We believe that as the market is convinced of the sustainability of this earnings recovery, Mynews valuations will rerate upwards. Key downside risks: sharp increase in operating costs, higher-than expected wastages and lower-than-expected revenues.
In the beginning of the year, I said, "We are ready to roll again, despite the weak economic data." As entrepreneurs we take risk, ignore fears. We look at the future, while operating with the current. Then, we hope for the best outcome, instead of doing nothing with no outcome.
Continuing with our expansion plan, we open 4 new outlets from 28th June to 1st July:
1. myNEWS @ U Teknologi Petronas, Perak
2. CU @ Jerantut, Pahang
3. SUPERVALUE @ Bukit Banyan, Kedah
4. CU @ U Teknologi Petronas, Perak
THANK YOU FOR YOUR SUPPORT!
We have planned outlet openings notably in Kelantan and Pahang, and while our initial aim was 100 new stores, we have amended it to at least 80 new outlets this year.