KUALA LUMPUR: RHB Investment Bank Bhd (RHB Research) expects a solid 122 per cent growth in MyNews Holdings Bhd's earnings for the financial year ending Oct 31, 2025 (FY25).
This will be driven by the anticipated turnaround of its convenience store CU, alongside the solid performance of MyNews, food processing centre (FPC) and WHSmith.
RHB Research said in a note that the company is focusing on driving growth through expansion in FY25, targeting 80-100 new outlets nationwide, comprising 60 per cent MyNews and 40 per cent CU.
Meanwhile, the first Maru Coffee outlet, which opened in fourth quarter (4Q) ended Oct 31, 2024, is performing well.
MyNews plans to open 20 more Maru Coffee outlets in FY25.
"Gross profit margin (GPM) expansion (2.6 percentage points to 37.6 per cent in FY24) is expected to be sustainable following the consolidation of MyNews and CU management teams, which has enhanced bargaining power with suppliers, alongside effective wastage control.
"With increased volume from the outlet expansion, we forecast GPM to reach 38 per cent in FY25," it said.
RHB Research also expects MyNews FPC's turnaround to sustain, driven by higher volume from outlet expansion, while WHSmith continues to improve, supported by the rebound in tourist arrivals.
The firm said MyNews' effective tax rate (ETR) in FY25 could normalise at 24 per cent, in line with the pre-pandemic average during profitable years, as CU is expected to achieve a turnaround in FY25.
RHB Research kept its "buy" call on MyNews with an unchanged target price of 81 sen a share.
MyNews' shares were traded at 67.5 sen on Friday, valuing the company at RM506.5 million.