Revenue growth was primarily driven by YoY expansion of its outlet network, with 246 new outlets added
by HABHAJAN SINGH
MALAYSIA’S largest operator of mini markets by number of stores, 99 Speed Mart Retail Holdings Bhd, is expected to continue its strong performance this year.
The company, founded by Lee Thiam Wah, who joined the ranks of billionaires upon the company’s public listing in September 2024, is expected to experience strong performance with steady growth and positive same-store sales growth at a time when consumer spending is expected to remain resilient.
After announcing its results for the first quarter ended March 31, 2025 (1Q25), the company remains a favourite among equity analysts. It has received eight ‘Buy’ and two ‘Hold’ calls among analysts tracked by Bloomberg, with a 52-week consensus target price (TP) of RM2.57.
The counter closed at RM2.19 on May 15, valuing the company close to RM18.5 billion.
The company declared a single interim dividend of 2.25 sen/share with an ex-date of May 28.
Further Outlet Expansion
The company posted a revenue of RM2.612 billion for 1Q25, up 7.7% from the same period a year earlier, and a net profit of RM143.2 million, marking a 7.5% increase from 1Q24.
In its exchange filing, the company said the revenue growth was primarily driven by the year-on-year (YoY) expansion of its outlet network, with 246 new outlets added — bringing the total to 2,833 outlets as of March 31, 2025.
Looking ahead, the company stated that following the commissioning of its distribution centre in Miri, Sarawak in March 2025, it is targetting the commencement of operations for a new distribution centre in Cyberjaya, Selangor by 2Q25.
With a built-up area of approximately 120,000 sq ft, the facility is expected to support around 200 outlets in and around Cyberjaya,
while also enhancing the distribution capacity of its bulk sales e-commerce platform, it said.
What to Expect
In a note released on May 16, Hong Leong Investment Bank Bhd (HLIB Research) maintained its ‘Buy’ call on the shares, with an unchanged TP of RM2.98.
Commenting on the company’s outlook, the research house said it was encouraged by the group’s strong performance, as it contin- ued to deliver steady growth in both top- and bottom-line figures.
It noted that the group remained committed to its expansion strategy, targetting the opening of at least 250 new outlets in 2025, with the immediate goal of reaching the 3,000-outlet milestone. The new stores will be concentrated in greenfield areas, particularly in East Malaysia and along the East Coast, while also continuing to strengthen its presence for the North and South.
“We like 99 Speed Mart due to its strong market presence and extensive store network, with competitive pricing that is well-positioned to drive stable and recurring revenue,” the research house said.
In another report, CIMB Securities Sdn Bhd also retained its ‘Buy’ call, with a TP of RM2.60.
It noted that the strong 1Q25 performance was driven by festive demand, a larger store count, higher other operating income, and improved operating leverage.
The research house projected an 11.9% YOY core net profit growth in FY25, driven by top-line growth.
Revenue growth is likely to be primarily supported a 1.4% increase in same-store sales and a 9.0% YoY rise in store count, equivalent to a net addition of approximately 250 new outlets.
“We expect the positive same-store growth sales to be underpinned by larger spending power (following increase in minimum wage from February 2025) and a shift in consumer behaviour towards down-trading, alongside persistently weak consumer sentiment.
“This trend should benefit 99 Holdings, given its value-focused business model that emphasises convenience and affordable pric- ing through a product mix centred on essential daily goods,” it said.
Meanwhile, RHB Investment Bank Bhd (RHB Research) also maintained its ‘Buy’ call, but with a higher TP of RM2.45, up from RM2.39.
It noted that 99 Speed Mart’s 1Q25 results were in line with expectations, supported by robust topline growth and effective cost control.
The research house said opportunities in underserved regions should continue to support the company’s outlet network expansion and increase its scale, thereby fuelling a three-year earnings CAGR of 9%.
“We also like the company’s domestic-centric and resilient earnings profile, which will appeal to investors amid the uncertainties brought about by the US tariff policy,” it said.
On its outlook, RHB Research said: “Generally, we expect consumer spending to remain resilient, underpinned by rising disposable income as a result of wage hikes and upsized govern- ment assistance packages for lower-income groups. Such an environment should benefit 99 Speed Mart, considering its extensive store network and consumer preference for mini-markets to shop for groceries.”
RHB Research added that it believed earnings growth over a longer term will also be sustained by 99 Speed Mart’s strategies to expand its addressable markets.
“These include diversifying its sourcing options to enhance its product offerings, and developing its bulk sales platform to entice customers it is unable to serve well enough with the retail model,” it said.
- This article first appeared in The Malaysian Reserve weekly print edition
The post 99 Speed Mart to continue strong show appeared first on The Malaysian Reserve.
