Broker: Maybank Investment Bank Berhad
Date of Report: September 18, 2025

Mynews Holdings: Poised for Accelerated Growth Amid Strong Turnaround and Robust Expansion Plans

Executive Summary

Mynews Holdings Berhad (MNHB) is on an impressive growth trajectory, underpinned by strategic improvements in operational efficiencies, successful turnaround efforts in its key business segments, and ambitious expansion plans. With a clear focus on cost management, diversification into higher-margin fresh food categories, and a consistent pipeline of new store openings, MNHB is set to deliver strong earnings growth in the coming years. Maybank Investment Bank Berhad reiterates its BUY rating on MNHB, maintaining a target price of MYR0.85, representing a 40% upside from the current share price.

Investment Highlights at a Glance

• Share Price (as of report): MYR 0.62
• Target Price: MYR 0.85 (+40%)
• Market Cap: MYR461.5M (USD110M)
• Total Stores (End-3QFY25): 679 (Mynews: 461, CU: 154, SuperValue: 37, Maru Kafe: 7)
• Key Shareholders: D&D Consolidated Sdn. Bhd. (52.9%), Jag Capital Holdings Sdn. Bhd. (13.9%), Dang Tai Kien (3.0%)

Growth Momentum: Revenue, Store Expansion & SSSG

MNHB achieved a robust 9MFY25 revenue growth of +9% year-on-year, fueled by the addition of 53 new stores and a modest, yet positive, same-store sales growth (SSSG) of 1-2%. Store footfall increased by 9% year-on-year in 3QFY25, a momentum expected to continue into 4QFY25.

Turnaround Success: CU and Food Processing Centre (FPC)

Both the CU convenience store chain and the in-house Food Processing Centre turned profitable in 3QFY25, providing a solid foundation for further margin expansion as fresh food offerings grow. The FPC currently operates at approximately 70% utilization, with capacity for additional production shifts if demand rises.

Outlook: Consistent Earnings & Aggressive Store Rollout

Maybank projects FY25 earnings growth of 82% year-on-year, expecting 4QFY25 earnings to remain in line with 3QFY25, buoyed by improved consumer sentiment (aided by the MYR100 SARA cash aid) and rigorous cost controls. For FY26, MNHB targets approximately 100 new store openings, with a primary focus on the Mynews and CU brands.

Price Performance and Financial Metrics

Business Model & Strategic Positioning

MNHB operates a diversified network of over 600 convenience stores under several brands: Mynews, Mynews SuperValue, Maru Kafe, and as the master franchisee for South Korea’s CU brand. The group’s sales mix spans tobacco, food & beverage, non-food items, and consumer services. Since 2020, MNHB’s focus on the “Hallyu” (Korean wave) trend via CU has driven rapid store growth, now exceeding 130 CU outlets. The group’s drive to shift its sales mix toward higher-margin fresh food categories, supported by its own food processing centre, is a key pillar of its growth strategy.

Financial Performance: Trends & Key Ratios

• 3-year revenue CAGR (FY21-FY24): +27%, driven by new store openings and improved sales per store.
• Earnings returned to the black in FY24 after pandemic-related losses and earlier operational challenges at the FPC and CU stores.
• Quarterly EBIT margins stabilized at ~3% since 1QFY24.
• Net gearing transitions to net cash by FY25E, reflecting improved free cash flow and disciplined capex.

ESG Initiatives and Governance

• Plastic Reduction: Only 6% of sales transactions used plastic bags in 2021, with 82% of those bags biodegradable in 2023.
• Food Waste: Returnable third-party food products; sustainable disposal solutions for in-house food waste under exploration.
• Energy Efficiency: 70% of stores now use LED lighting.
• Board Composition: 50% independent directors, 33% female directors (meeting local governance recommendations).
• Social Responsibility: The “Allowance That Allow” program supports underprivileged students using customer donations.
• ESG Score: Improved to 50 (out of 100), reflecting enhanced disclosures but with room for concrete long-term targets.

Risks and Swing Factors

Upside Catalysts

• Higher-than-expected SSSG and basket size
• Diversification away from low-margin tobacco
• Accelerated store rollout

Downside Risks

• Weak consumer spending amid macro uncertainty
• Rising minimum wage pressures on margins
• Potential delays in new store openings

Valuation and Recommendation

Maybank values MNHB at a target price of MYR0.85, based on a 26x CY26E PER, representing the stock’s historical mean. With robust earnings recovery, ongoing margin expansion, and an ambitious expansion pipeline, MNHB is well-positioned for sustained growth. The current valuation offers a compelling entry point for long-term investors.

Conclusion: A Compelling Growth Story with Strengthening Fundamentals

Mynews Holdings stands out for its operational turnaround, strategic focus on high-margin categories, and aggressive store expansion. With improving profitability, prudent financial management, and enhanced ESG disclosures, MNHB offers a solid investment proposition in Malaysia’s consumer discretionary sector. The stock’s 40% upside to the target price and a return to positive net cash position by FY25E cement its status as a top pick for investors seeking exposure to the region’s growing convenience retail landscape.