PETALING JAYA: Analysts expect stronger earnings for convenience store operator MyNews Holdings Bhd in the third quarter of its financial year ending Oct 31 (3Q25), supported by demand recovery and potential margin gains from the cost management and better operating leverage from its food processing centre.

This was despite MyNews’s 2Q25 results coming in below expectations with a net profit of RM2.8mil, down 29.8% quarter-on-quarter, but up 8.9% year-on-year (y-o-y), bringing net profit for its first half of FY25 (1H25) to RM6.9mil.

In light of the latest results, CIMB Research has revised downward the group’s FY25 to FY27 core earnings per share forecasts by between 23% and 25% and also, reduced the stock’s target price to 73 sen.

Nonetheless, the research house still retained a “buy” rating on MyNews, supported by earnings recovery following the company’s return to profitability in FY24.

CIMB Research noted that in 1H25, MyNews continued to expand its store network by adding 54 new outlets to reach a total of 676 stores, comprising 495 MyNews stores, 154 CU Mart stores, 20 WHSmith stores and seven Maru Coffee outlets.

“We believe that MyNews’ valuation is attractive, given its robust earnings profile and its established brand name in Malaysia’s convenience store segment,” it added.

Meanwhile, CGS International Research (CGSI Research) said it viewed MyNews’ 2Q25 performance as encouraging with “more to come”. The research house reiterated an “add” call on the stock, as it is positive on the trajectory of the company’s earnings recovery.

CGSI Research said MyNews’ valuations would likely be re-rated as the market becomes convinced of the sustainability of its earnings recovery and turnaround for CU Mart.

MyNews retained a “buy” rating with RHB Research as the research house remained encouraged by the continued momentum in MyNews’ earnings recovery.

“Our robust 56% FY25 earnings growth forecast is underpinned by the expansion of the strong performance of the core MyNews brand, CU Mart’s gradual recovery and solid contributions from other business units,” the research house added.

RHB Research has also set a new target price for MyNews at 80 sen.

“We believe the current share price, down 22% year-to-date, has yet to reflect the group’s sustainable turnaround and strengthening fundamentals,” the research house said.