MyNews targets 720 outlets by Q2 FY27

MyNews Holdings Bhd intends to expand its network of convenience stores to 720 outlets by the end of the second quarter in its FY27 financial year. As of October 2026, the company had already established 712 outlets, following the closure of 69 underperforming stores. The operator has added three stores, marking a 0.4% year-on-year increase.

MyNews remains cautious in selecting new locations, prioritising areas with high sales potential like airports and shopping malls, while being selective about their expansion. Despite the limited growth in store count, the company believes in store productivity improvements, with sales per store rising by 8% year-on-year at MyNews and 5% at CU in Q3 FY26.

This progress is attributed to rationalising the store network and improving the product mix. The firm anticipates further growth through a better product range, especially higher-margin ready-to-eat (RTE) items like chilled desserts and smaller-portioned meals. However, rising rental, logistics, and labour costs continue to impact MyNews's profitability.

The firm expects a minimum wage increase to RM2,000 per month from June 2027, which could add RM4.3 million to the company's annual labour costs, assuming a 40% employee impact. MyNews plans to offset these pressures through selective store-level price adjustments and additional cost optimisation. It is also investing in AI-driven automation, which could reduce its headquarters workforce by 20-30%, having already cut finance headcount by 15%.

Although implementation costs might affect short-term profit margins, these initiatives aim to decrease reliance on labour and improve inventory management, with significant efficiency gains expected in FY28 and FY29. CIMB Securities suggests that MyNews is considering developing a new distribution centre on its recently acquired 5.46-hectare site in Serendah, which would support RTE products expansion and alleviate capacity constraints at existing facilities.

This facility, if realized within two years, could reduce the company's driver workforce by approximately half, leading to long-term logistics cost savings. Despite these strategic moves, CIMB Securities maintains a "Hold" rating on MyNews with an unchanged target price of 51 sen, citing persistent cost pressures likely to limit near-term earnings recovery.