KUALA LUMPUR – AmInvestment Bank Bhd remains confident in MyNews Holdings Bhd’s (MNHB) recovery prospects for the financial year ending October 31, 2022 (FY22) based on returning footfall volume and the expected success of its Ichi QQ food line and CU outlets.
However, the investment bank cut its net profit forecast for FY21 by 34% to take into a lower-than-expected number of stores being opened, as well as the effects of lower consumer appetite during the second movement control order (MCO).
“While February 2021 was soft, the group is seeing an uptrend in March, with a stable and growing basket size. Affected clusters such as malls, transit and mixed-development are showing a double-digit growth recovery.
“MyNews needs a 30% increase from its current operational metrics to break even,” said AmInvestment Bank in a research note today.
It said to date, 150 MyNews outlets have started selling Ichi QQ bakery goods, which provide a cheaper alternative to Maru products, and response had been positive so far.
MyNews had focused on its outlets expansion efforts towards the northern region as footfall in the southern region is still weak, said AmInvestment Bank.
“So far, the fresh food segment has been well accepted,” it added.
Meanwhile, Maybank Investment Bank Bhd said MNHB’s key challenges lies in its ability to drive increased consumer traffic to its stores along with stemming continued losses at its food processing centre (FPC).
“FPC’s losses should narrow gradually in conjunction with MNHB’s CU store expansion but existing MyNews stores will still represent the bulk of ready-to-eat segment volume demand in the near-term.
“We make no changes to our earnings estimates, ‘Sell’ call and target price of RM0.77 per share,” it said in a research note.
As at 10.45am, MNHB rose 2 sen to 93 sen, with 1.997 million shares traded. – Bernama, March 29, 2021
