This article first appeared in The Edge Malaysia Weekly on June 22, 2026 – June 28, 2026
MyNews Holdings Bhd (KL:MYNEWS) should manage investor expectations on its investments in artificial intelligence (AI) and process automation personnel as the benefits may take time to materialise, especially since the investments may lead to an increase in administrative costs and eat into the group’s margins, as was the case for the three months ended April 30, 2026 (2QFY2026).
If the company continues to make such investments, but the benefits in the form of better cost savings and improved sales growth do not emerge as quickly, it will continue to see razor-thin margins in the quarters ahead. It recorded a net profit of RM55,000 in 2QFY2026 — 97% lower than the RM2.28 million in the previous corresponding quarter, despite revenue rising 11.6% to RM226 million from RM202.6 million.
The plunge was partly attributed to higher administrative costs, which increased 20% during the quarter, following the recruitment of personnel skilled in AI and process automation. Cost of sales also grew faster than revenue during the period.
Although it recorded a razor-thin net profit for the quarter, MyNews declared a dividend of one sen per share, double the half sen in the previous corresponding quarter. Could this be seen as an indirect declaration of its confidence in its near-term growth?
In announcing its financial results, the group said it remained cautiously optimistic about its performance for the remainder of the financial year despite the prevailing macroeconomic uncertainties. It added that it would focus on expanding and optimising its store network by increasing its footprint while undertaking rationalisation of underperforming outlets to improve overall efficiency.
The group will also seek to improve gross margins through better procurement strategies, supplier negotiations and product mix optimisation, while maintaining disciplined cost control to manage rising labour, rental and utility expenses.
From a productivity and efficiency prospective, MyNews’ investments in skilled personnel is commendable, compared with the situation at companies that continue to count on cheap foreign workers rather than invest in automation for various reasons.
AI adoption is the way forward. It is time for investors to learn to be patient with this type of capex, which yields long-term gains.
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