Date: September 25, 2024
Broker: CGS-CIMB Securities Malaysia
Company Overview
Mynews Holdings Berhad is a leading convenience store operator in Malaysia. The company has expanded its operations through the establishment of in-house food production centers (FPC) to supply its stores, enhancing operational efficiency and product offerings.
Financial Performance and Earnings Outlook
CGS-CIMB has maintained an “Add” recommendation on Mynews Holdings with a target price of RM1.18. The company posted strong 3Q24 earnings, driven by the positive performance of its FPC operations, which have reached breakeven.
Key Drivers for Growth
-
FPC Breakeven: The breakeven of Mynews’ food production center (FPC) is a significant milestone for the company. The FPC had been a major capital investment, and its ability to generate positive returns is expected to boost profitability moving forward.
-
Earnings Growth in 3Q24: Mynews Holdings delivered strong earnings growth in the third quarter of 2024. The company’s strategy of focusing on its in-house production and supply chain improvements is paying off, contributing to a favorable financial outlook.
Valuation and Recommendation
Mynews Holdings is expected to continue benefiting from its FPC operations and earnings growth trajectory. The positive momentum from 3Q24, coupled with the breakeven of the FPC, reinforces CGS-CIMB’s recommendation to “Add” the stock with a target price of RM1.18. This growth is supported by operational efficiency and improved profit margins.
