RHB Research has lowered its target price for MyNews Holdings Bhd to 43 sen from 50 sen while maintaining its Neutral rating, after the convenience store operator’s nine-month FY2026 earnings fell short of expectations amid rising operating costs.
In its latest research report, RHB said MyNews recorded core profit of RM8 million for the first nine months, down 37% year-on-year and accounting for only 56% of its full-year forecast and 51% of consensus estimates.
Third-quarter core profit recovered to RM3.8 million from RM100,000 in the preceding quarter as customer traffic normalised after Ramadan, but remained 41% lower than a year earlier.
Revenue for the nine-month period rose 10% to RM716.2 million, supported by higher in-store sales and an expanded retail network of 685 outlets, up 26 from a year earlier.
However, gross profit margin narrowed by 0.8 percentage points to 37.5%, reflecting changes in product mix and increased promotional activity.
RHB said operating expenses remained the main drag on profitability, with administrative costs rising about 21% due largely to IT investment, while selling and distribution expenses increased approximately 11% alongside store expansion.
Inventory write-offs and wastage also climbed to RM22.9 million, equivalent to 3.2% of sales, compared with 2.8% a year earlier, as MyNews expanded its fresh food offering.
Earnings Forecasts Cut On Slower Margin Recovery
RHB reduced its FY2026, FY2027 and FY2028 earnings forecasts by 14%, 14% and 13%, respectively, to reflect higher operating costs and a slower recovery in margins.
The research house expects revenue momentum to remain stable but said near-term profitability could remain under pressure as MyNews continues rationalising underperforming stores and investing in technology and automation.
Its newly incorporated MyNews Tech unit is expected to support internal IT development, while the Myvndr automated vending business is targeted for launch in FY2027.
RHB said these initiatives could improve productivity over time, although upfront costs are expected to precede meaningful efficiency gains.
The revised 43 sen target price implies approximately 19 times FY2027 forecast earnings, while the projected FY2027 dividend yield stands at about 2%.
