CIMB Securities has maintained its REDUCE call on 7-Eleven Malaysia Holdings Bhd, cutting its target price to RM1.13 from RM1.26 after the retailer’s first-half earnings missed expectations.
The research house said 1H26 core net profit fell 56.5% year-on-year to RM15.4 million, accounting for just 36.1% of its full-year forecast and 49.7% of Bloomberg consensus.
The weaker earnings came despite revenue growth, with 2Q26 revenue rising 9.7% year-on-year to RM883.6 million as the store network expanded to 2,776 outlets. However, gross profit margin narrowed 1.6 percentage points to 29.7% amid higher promotional activity and tactical price adjustments.
CIMB said administrative and other operating expenses surged 40.6% year-on-year, significantly outpacing revenue growth, while the effective tax rate jumped to 33.5% from 7% a year earlier. The Indonesian pharmaceutical business also remained a drag, recording a RM1.5 million loss after tax in the quarter.
Still, the research house expects 2H26 earnings to improve from the first half, supported by continued store expansion towards 100 net new outlets for FY26 and further conversions to its higher-productivity CAFé format.
However, CIMB expects cost-of-living pressures to keep discretionary spending soft while elevated rental, utility and staff costs could continue weighing on earnings. It cut FY26-FY28 core profit forecasts by 10.3%-12.6%, with the RM1.13 target price based on a 29 times CY27 price-to-earnings multiple.
