By Ying Xian Wong
Mynews Holdings shares fell early Tuesday as analysts cast doubt on its outlook after the convenience-store operator remained unprofitable in its second quarter.
Shares in the Malaysian company slid as much as 8.2% and were recently 4.1% lower at 0.47 ringgit, bringing its year-to-date losses to 26%.
Mynews late Monday said its second-quarter net loss was MYR6.3 million ($1.4 million), narrowing from MYR10.2 million a year ago, supported by higher revenue contributions from new outlets. Quarterly revenue was 23% higher at MYR174.2 million, mainly due to increased outlet numbers and better overall in-store sales.
Maybank Investment Bank said Mynews’s outlook remains dim amid slower consumer spending and rising store-operating costs.
The subdued sales momentum and continuing food-production-center losses may hamper Mynews’s earnings recovery, analyst Jade Tam said in a note.
Tam said she expects Mynews to register a net loss of MYR16 million for the current fiscal year and cut her earnings forecasts for fiscal years 2024 and 2025 by 82% and 70%, respectively, after second-quarter results missed expectations.
Maybank cut its target price on Mynews to MYR0.51 from MYR0.59 but kept a hold rating.
AmInvestment Bank was also cautious about the company’s outlook, saying that its CU-branded stores might need a longer gestation period amid competition and that a slower consumer-spending environment could weigh on footfall.
Analyst Vanessa Leong cut Mynews’s earnings forecasts for fiscal years 2023 to 2025 by 13%-40% to factor in higher operating-cost projections at its food-production center.
AmInvestment Bank lowered its target price on the stock to MYR0.47 from MYR0.54 but maintained a hold rating.
Write to Ying Xian Wong at [email protected]
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