,Despite a soft February 2021, the homegrown MyNews convenience store chain is seeing an uptrend this month, given the growing amount of products that it offers
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PETALING JAYA: MyNews Holdings Bhd’s encouraging recovery this month in the pick-up in footfall to its stores and innovative product mix will help boost earnings.
Despite a soft February 2021, the homegrown convenience store chain is seeing an uptrend this month, given the growing amount of products that it offers.
“Affected clusters such as malls, transit and mixed-development are showing double-digit growth recovery. MyNews needs a 30% increase from its current operational metrics to breakeven, ” said AmBank Research.
Last week, MyNews announced a net loss of RM8.9mil in its first quarter ended Jan 31 (Q1) on the back of declining footfalls due to the targeted movement restrictions between November 2020 and January 2021.
For financial year 2021 ending Oct 31 (FY21), the group has earmarked a capital expenditure of RM50mil to open 100 new outlets.
For FY21, it has cut its net profit forecast by 34% due to the lower-than-expected number of stores being opened, as well as the effects of lower consumer appetite during the second movement control order (MCO).
“The group noticed a change in consumer trends during the second MCO compared with the first MCO. During the second MCO, there was less home pantry loading while sales for indulgent products, including sin goods and ice cream, were higher, ” it noted.
Moving forward, the research house is confident about the group’s FY22 forecast recovery prospects on the anticipated return of footfall volume and the success of its Ichi QQ food line and South Korean brand CU outlets.
Last year, the homegrown convenience store chain announced that it would be adding the popular brand CU to its stable as part of its expansion plan.
As MyNews’ maiden CU store is expected to open this week, brokerage firms expect the brand’s potential scalability to support its earnings growth in the long run. RHB Research expects the South Korean brand and its offerings to be met with encouraging reception.
“Although earnings contributions from CU may be muted in the near term, we believe CU can provide a strategic platform for the group to offer its quality fresh food products, leveraging on the higher-end brand image that is able to attract discerning consumers with higher spending power, ” the research house said.
Meanwhile, MyNews stores and food processing centre (FPC) should benefit from the post-pandemic recovery, given the entrenched store network.
Given the relaxation of movement restrictions and CU’s opening, RHB Research foresees the group’s FPC to show improvement with better store footfalls moving forward.