KUALA LUMPUR (April 1): MyNews Holdings Bhd (KL:MYNEWS) is expected to see improved performance for the rest of the year, driven by in-store sales and network expansion, despite a disappointing results for the first quarter ended Jan 31, 2026 (1QFY2026).

“The quarterly performance fell short of expectations...mainly owing to higher-than-expected opex (including the expanded service tax scope covering leasing services) and weaker operating leverage,” said CIMB Securities in a note on Wednesday.

The house expects earnings momentum to improve in subsequent quarters, especially in 2HFY2026. 

"While 2Q may be seasonally softer owing to the Ramadan fasting period, we project a pickup from 2H driven by continued store expansion and enhancements to product offerings to drive traffic and basket size, particularly in the ready-to-eat food segment," it added.

This, alongside cost optimisation initiatives and plans to increase automation usage in its operations, as well as a larger store base should also improve economies of scale and lift utilisation at MyNews’ food processing centre, said CIMB Securities.

The house said MyNews' 1QFY2026 ended Jan 31 accounted for only about 17% of its full-year forecasts.

CIMB Securities also noted that administrative expenses surged 22% year-on-year, driven by higher wages, promotional activities, and one-off repair costs alongside the addition of 16 new stores during the quarter. 

CIMB Securities maintained its 'buy' rating on the stock, but lowered its target price to 75 sen from 79 sen, to reflect higher operating costs.

While the stock has seen an absolute price decline of 8.5% over the last 12 months, research houses point to a strong earnings trajectory with a projected three-year core net profit CAGR (compound annual growth rate) of 16.2%. 

Meanwhile, CGS International reiterated its 'add' call with a target price of RM1.00, citing the stock's undemanding valuation compared to its peers.

The research house expects performance to be supported by continued store roll-outs, with a target of 100 new stores for FY2026, and improvements in the ready-to-eat food segment.

“We expect revenue pick-up from its new store openings and improved product offerings to lift profitability in the coming quarters,” CGS International added.

MyNews shares were last traded at 54 sen, giving the company a market capitalisation of approximately RM405 million. 

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MyNews’ 1Q net profit up 5.2% on store expansion, reduced tax expense