MAYBANK IB Research has lifted myNEWS Holdings Bhd’s ESG 2.0 score to 50 (out of 100) from 28 previously following the convenience retail chain store operator’s better carbon emission data transparency as well as more detailed sustainability strategies as per outlined in its most recent 2023 Annual Report.
Even then, the research house noted that a clear gap remains with the group’s lack of ESG (environment, social and governance) targets which – if addressed – could place myNEWS at the forefront of sustainability disclosures among its domestic convenience store peers.
“Based on myNEWS’s 2023 Annual Report, the group has greatly improved on its sustainability disclosures within the quantitative environmental (“E’) category, particularly for scope 1, 2 & 3 carbon (CO2) emissions,” observed analyst Jade Tam in a company update.
“Once a trend is established through consistent annual disclosures, investors will be able to better track and monitor the group’s ESG progress.”
Although myNEWS has published key areas to address under individual ESG pillars. Maybank IB Research reckoned that concrete ESG targets remain absent in its latest sustainability statement.
“Note that its convenience store peers have not committed to long-term ESG targets as well,” the research house pointed out.
Prospect-wise, Maybank IB Research said its expectations for myNEWS’ FY10/2024 earnings turnaround is premised on narrowed losses for both its CU stores and food processing centre.
“The group’s focus on ramping up fresh food SKUs (stock-keeping units) to existing myNEWS stores could also gradually drive gross profit margin upwards in tandem with the group’s s new store opening target (+100 stores in FY10/2024),” envisages the research house. “Our earnings estimates are unchanged.”
All in all, Maybank IB Research retained its “buy” rating on myNEWS with an unchanged target price of.62 sen or an 18% premium over the company’s closing price of 52.5 sen yesterday (April 17).
At 12.22pm, myNEWS was unchanged at 52.5 sen with 61,000 shares traded, thus valuing the company at RM394 mil. – April 18, 2024
