MyNews targets 720 outlets by Q2 FY27

KUALA LUMPUR: Mynews Holdings Bhd plans to open another eight stores by the end of 2026, bringing its total network to 720 outlets by the middle of the second quarter of its current financial year 2027 (Q2 FY27).

As at end-October 2026, the convenience store operator had 712 outlets, as the company prioritised profitable store expansion following the closure of 69 underperforming outlets.

The convenience store operator recorded a net addition of three stores, representing a 0.4 per cent year-on-year increase.

"Mynews remains selective in choosing new store locations, prioritising productivity over network expansion, although it remains open to higher rental locations such as airports and shopping malls where sales potential is strong," CIMB Securities Sdn Bhd said.

"Despite modest network growth, we view the improvement in store productivity positively, with average sales per store rising eight per cent year-on-year (YoY) at Mynews and five per cent YoY at CU in Q3 FY26, supported by store rationalisation and a better product mix," it said in a note.

The firm said management expects further growth from an improved product range and new launches, particularly higher-margin ready-to-eat (RTE) products such as chilled desserts and smaller-portioned meals.

Food currently accounts for 52 per cent of sales at CU stores, compared with a low teens' contribution at Mynews outlets.

However, the firm said rising rental, logistics and labour costs continue to weigh on Mynews' profitability despite improving sales momentum.

It estimated that the increase in the minimum wage to RM2,000 per month from June 2027 could raise the company's annual labour costs by RM4.3 million, assuming 40 per cent of its 3,000 employees are affected.

"To mitigate these pressures, Mynews plans selective store-level price adjustments based on local demand, alongside further cost optimisation.

"The company is also investing in artificial intelligence-driven automation, with the potential to reduce its 300 headquarters workforce by 20 to 30 per cent, having already cut finance headcount by 15 per cent," it said.

The firm said implementation costs could weigh on near-term profit margins, but these initiatives are expected to gradually reduce reliance on labour and improve inventory management, with more significant efficiency gains anticipated in FY28 and FY29.

CIMB Securities said Mynews is exploring plans to develop a new distribution centre on its recently acquired 5.46-hectare site in Serendah within the next two years.

The proposed facility would support the expansion of chilled and frozen RTE products while easing capacity constraints at its existing Sungai Buloh distribution centre and Kota Damansara production hub.

The firm said greater automation at the proposed facility could potentially halve the company's current workforce of about 170 drivers, resulting in longer-term logistics cost savings.

CIMB Securities maintained its 'Hold' call on Mynews with an unchanged target price of 51 sen, citing persistent cost pressures that could limit its near-term earnings recovery.