CGS International
Date of Report: September 12, 2025

Mynews Holdings Berhad: Breaking Pre-Covid Profit Records and Poised for Explosive Growth

Introduction: Mynews Holdings Surprises the Market with Robust Q3 Earnings

Mynews Holdings Berhad has delivered a blockbuster Q3 FY2025, with results that not only surpassed market expectations but also marked a significant return to pre-pandemic profitability. Supported by strong revenue growth, improving margins, and a notable turnaround in its CU convenience store segment, Mynews is now on track for accelerated expansion. CGS International reiterates an Add recommendation, raising the target price to RM1.00, reflecting a potential 49% upside from current levels.

3QFY25 Financial Performance: Revenue and Profits Surge

The third quarter of FY2025 saw Mynews posting a core net profit (CNP) of RM6.4 million, up a staggering 145% year-over-year (YoY) and 182% quarter-over-quarter (QoQ). This propelled 9MFY25 CNP to RM12.6 million, a 124% YoY increase and well above analyst forecasts, reaching 85% of CGS International’s and 75% of Bloomberg’s full-year estimates.

Key Takeaways:

• Gross margins expanded, supporting stronger bottom-line growth.
• Operating expenses were lower, while tax expenses also surprised to the downside.
• Declared a surprise interim dividend of 0.5 sen/share, bringing 9MFY25 DPS to 1 sen (vs. FY24’s 0.5 sen/share).

Growth Drivers: Store Expansion, Consumer Spending, and Government Stimulus

Mynews’s revenue jump was driven by a combination of post-Hari Raya festive recovery and aggressive store network expansion, with 40 new stores added in 3QFY25 alone. The company expects further tailwinds from the Malaysian government’s RM100 cash handout to adults, spurring higher in-store spending. Targeted promotions are being rolled out to capture this incremental demand.

CU Convenience Store Turnaround: A Landmark Achievement

A pivotal highlight this quarter was the turnaround of the CU segment. For the first time, Mynews’s CU operations are believed to have broken even, with management projecting profitability from FY26F onwards. The food processing centre (FPC) also reported its strongest gains since returning to profitability a year ago, benefitting from increased demand for fresh and ready-to-eat foods post-fasting month.

Revised Earnings Estimates and Valuation: Strong Upgrades

Following the robust Q3 results, CGS International has upgraded FY25F/26F/27F core net profit estimates by 33.8%, 17.2%, and 10.9% respectively. The target price is raised from RM0.75 to RM1.00, reflecting growing confidence in Mynews’s earnings recovery, margin expansion, and store rollout strategy.

Investment Highlights:

• Mynews is trading at a 16x CY26F P/E, still at a discount to local and regional peers (17-23x range).
• Core EPS CAGR forecast at 59% from FY24 to FY27F.
• Upside risks include robust consumer spending and successful store rollouts; downside risks remain on the cost and wastage front.

Peer Comparison: How Mynews Stacks Up Against Regional and Global Rivals

Balance Sheet and Key Ratios: Healthy Financials Support Growth

ESG Analysis: Room for Improvement, Initiatives Underway

Mynews currently scores a D+ on the LSEG ESG scale, ranking in the lowest quartile among major Malaysian consumer names. Notable ESG points and trends include:

• Food safety is a major focus, with strict hygiene practices at the FPC, but details on standards and audits remain undisclosed.
• Disclosures have improved for emissions at headquarters, but there are no finalized water, energy, or emission targets, and employment policy gaps remain (e.g., on child and forced labor).
• ESG metrics are not expected to materially impact revenue or earnings in the near term, though enhanced disclosures could attract more institutional investors.
• Store expansion and longer operating hours will likely increase energy use and GHG emissions, potentially leading to higher capex for renewable initiatives.

Dividend Outlook: Growing Returns for Shareholders

With earnings momentum, the dividend per share is set to rise significantly over FY25F-FY27F, with a payout ratio expected to increase from 40% in 2024 to 65% by 2027. Dividend yields could reach nearly 5% by FY27F.

Risks to Monitor

• Sharp rises in operating costs and wastage levels could pressure margins.
• Execution risk in rapid store expansion and maintaining profitability at new outlets.
• Potential ESG controversies, although not currently material.

Conclusion: Mynews Holdings—A High-Conviction Recovery Play with Multiple Catalysts

Backed by stellar earnings momentum, aggressive store expansion, a successful CU turnaround, and improving capital returns, Mynews Holdings stands out as a top Malaysian retail recovery play. With the stock trading at a notable valuation discount and delivering accelerating profit growth, the outlook is robust for investors seeking exposure to the consumer rebound.

Other Major Malaysian Consumer and Retail Stocks: Peer Valuations and Outlook

Summary: A Bright Outlook for Mynews and Malaysian Retail

With a solid recovery in earnings, aggressive expansion, and strategic initiatives to capture rising consumer demand, Mynews Holdings is well-positioned among its peers. Its discounted valuation, strong profit growth, and improving returns make it an attractive opportunity for investors looking to tap into Malaysia’s retail resurgence. As Mynews continues to execute on its growth plans and enhance its ESG profile, further upside may be realized in the coming quarters.