By SHAZNI ONG

Kenanga Investment Bank Bhd has maintained its ‘Underperform’ stance on MyNews Holdings Bhd, with an unchanged target price of RM1.25, based on 27 times financial year 2019 estimated earnings per share.

The research house said this is due to the stiff competition and saturated market in the modern convenience stores space, directly related to the regional market trend.

“Key risks to our call include higher than expected sales and lower than expected operating expenses (opex),” Kenanga said in its research note yesterday.

Last Friday, MyNews’ net profit increased to RM8.24 million in the first quarter ended Jan 31, 2019 (1Q19), from RM6.34 million in the same period last year.

Revenue for the quarter strengthened to RM123.5 million from RM90.12 million a year earlier, principally contributed by the increase in the number of outlets and higher sales generated by existing outlets consequent to the continuous improvement of product offerings and store concept.

Commenting on the 1Q19 result, Kenanga said it came in within expectations at 26%/25% of the bank/consensus full-year earnings estimates, and noted that no dividend was declared for the quarter.