Maybank Investment Bank Berhad
Date of Report: September 12, 2025

Mynews Holdings: Strong Earnings Recovery Powers Upgrade to BUY as Store Growth and Margins Impress

Executive Summary: Mynews Holdings Surges on Robust Earnings and Optimistic Outlook

Mynews Holdings (MNHB MK), a leading player in Malaysia’s consumer discretionary sector, has delivered a standout third quarter in fiscal 2025, surpassing market expectations thanks to lower-than-expected operating and tax expenses. With a solid year-to-date performance, improved gross profit margins, and ongoing store expansion, Maybank Investment Bank has upgraded its recommendation from HOLD to BUY, raising the target price to MYR0.85 — a promising 28% upside from the current trading levels. This comprehensive review examines the key financial highlights, operational drivers, risk factors, and strategic outlook that make Mynews Holdings a compelling story for investors in Malaysia’s retail space.

Key Investment Highlights

• Upgrade to BUY: Target price raised to MYR0.85 (+28%) on improved earnings momentum and favorable consumer sentiment.
• Strong Quarterly Results: 3QFY25 net profit of MYR6m, up 145% YoY and 182% QoQ, with 9MFY25 net profit of MYR13m (+124% YoY).
• Operational Efficiency: Lower operating and tax expenses drive margin expansion. Gross profit margin increased by 0.8ppts YoY in 3QFY25.
• Growth Drivers: Store expansion, product mix improvements, and higher consumer spending outlook support robust revenue growth.
• Dividend Upside: Interim dividend per share (DPS) of 0.5 sen declared, bringing 9MFY25 DPS to 1 sen (59.5% payout ratio).

Financial Performance: Quarterly and Cumulative Highlights

Strategic Drivers Behind the Earnings Beat

• Revenue Acceleration: 3QFY25 revenue climbed 11% YoY, backed by improved store sales and the addition of 53 new stores year-on-year.
• Product Mix Improvements: Higher contribution from fresh food and convenience items led to a 0.8 percentage point YoY increase in gross profit margin.
• Cost Discipline: Selling, distribution, and administration (SDA) expenses rose 11% YoY due to wage hikes and the sales and service tax (SST), but SDA as a percentage of sales fell to 34% (-0.8ppts YoY), supporting stronger EBIT growth.
• Tax Efficiency: Effective tax rate dropped significantly to 21% (-20ppts YoY), amplifying net profit growth.
• Dividend Boost: Interim DPS of 0.5 sen declared, bringing total 9MFY25 DPS to 1 sen with a payout ratio of 59.5%.

Upgraded Earnings Forecasts and Target Price

Maybank has raised its FY25E-FY27E earnings estimates by 16%-53%, reflecting:

• Lower operating expenses and effective tax rate (now 33% vs. 48%/35%/35% previously forecasted).
• Higher assumed dividends (DPS of 1 sen p.a. vs. 0.5 sen p.a. previously).
• Continued improvements in consumer sentiment, with tailwinds from government stimulus (MYR100 SARA aid) and festive spending.

The valuation now rolls forward to a CY26E PER of 26x (from a previously normalised 2016-2018 PER of 32x).

Comprehensive Historical and Projected Financials

Business Model and Growth Strategy

• Multi-Brand Retailer: Operates convenience stores under Mynews, Mynews SuperValue, Maru Kafe, and is the master franchisee for South Korea’s CU brand.
• Store Network: Over 600 stores in Malaysia, with >130 CU stores as of the report date.
• Product Diversification: Expanding into higher-margin fresh food and beverages, manufactured at its own food processing center, to reduce reliance on low-margin tobacco sales.
• Digital and Promotional Initiatives: Heightened store promotions and participation in the MyKasih/SARA government aid program through 37 Mynews Supervalue stores.

Valuation, Share Price Performance, and Major Shareholders

• Current Share Price: MYR0.67
• 12-Month Target Price: MYR0.85 (+28%)
• Market Capitalisation: MYR502.7 million (USD119 million)
• Free Float: 52.9%
• Major Shareholders:
  • D&D Consolidated Sdn. Bhd.: 52.9%
  • Jag Capital Holdings Sdn. Bhd.: 13.9%
  • Dang Tai Kien: 3.0%
• 52-week High/Low: MYR0.70 / MYR0.51

Operational and Financial Metrics

• Revenue CAGR (FY21-FY24): +27% driven by store openings and increased average sales per store.
• Profitability: Return to profitability in FY24 after pandemic and food processing center losses, with quarterly EBIT margins stabilizing at ~3% since 1QFY24.
• Cash & Liquidity: Net gearing expected to move to net cash from FY25E onwards.
• Capex/Revenue: Averaging 4.6% in FY24E-FY27E, reflecting ongoing store expansion and investment.

Growth and Risk Factors

Upside Catalysts:

• Stronger-than-expected same-store sales growth and larger average basket size.
• Diversification away from tobacco into higher-margin categories.
• Accelerated store rollout and network expansion.

Downside Risks:

• Soft consumer sentiment due to macroeconomic headwinds.
• Rising wage costs or future hikes in Malaysia’s minimum wage.
• Delays in store opening schedules or regulatory changes impacting retail margins.

Share Price and Index Performance

• Absolute Returns: 1M +16%, 3M +15%, 12M +13%
• Relative to Kuala Lumpur Composite Index: 1M +14%, 3M +10%, 12M +16%

Historical Recommendations and Target Price Trajectory

Conclusion: Investment Case for Mynews Holdings

Mynews Holdings’ impressive turnaround, anchored by disciplined cost control, strong store expansion, and margin improvement, sets a positive trajectory for the company. With robust financial metrics, a resilient business model, and an upgraded outlook, MNHB stands out as a key beneficiary of Malaysia’s recovering retail landscape. Investors seeking exposure to Malaysia’s growing consumer sector should closely watch developments in Mynews Holdings as it continues to execute its strategic vision and deliver shareholder value.