MyNews largely shielded from SST impact
The research firm said MyNews had modelled a worst-case scenario in which all its outlets are affected by the tax, but at least one-third of its stores are likely to be exempt.
These potential exemptions mostly involve high-street outlets, where landlords are expected to earn below the RM1 million annual rental income threshold for the SST to apply.
Meanwhile, the mandatory two per cent Employees Provident Fund (EPF) contribution for foreign workers is expected to have a minimal impact on its overall operating costs.
"We are slightly negative on the potential increase in costs resulting from the services tax on leasing and mandatory EPF contribution for foreign workers.
"However, we make no changes to our financial year 2026 (FY26) to FY27 earnings forecasts as MyNews has indicated plans to mitigate the potential impact of these cost increases through various measures," the firm said.
Amid the expanded SST, MyNews estimated that its FY26 operating cost would increase by RM4.6 million, about 18 per cent of CIMB Securities' current FY26 core net profit forecast.
MyNews has 650 stores as at end-April 2025, comprising 487 MyNews stores, 148 CU outlets, 20 WHSmith stores and four Maru Coffee outlets.
It aims to open 100 new stores by the end of the year, representing a 15.6 per cent increase from 640 stores as at end-2024.
Most of the planned openings comprise MyNews and CU outlets, with 10 new openings expected for its Maru Kafe brand.
CIMB Securities said MyNews has stepped up its store rollout in the third quarter, with a focus on high-traffic and public transit locations to boost footfall.
"The continued expansion of its store network is also expected to enhance utilisation of its food processing centre, which is currently operating about 70 per cent, thereby supporting margin improvement.
"Our forecast assumes a more conservative net addition of 50 net new stores in FY25, after factoring in planned store closures," the firm said.
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