99 Speed Mart’s Share Price Lower Despite Positive Outlook, Growth Strategies


Kuala Lumpur: 99 Speed Mart Retail Holdings Bhd’s (99 Speed Mart) share price on Bursa Malaysia had slipped during the afternoon trading, despite analysts projecting a positive outlook based on the company’s growth strategies. At noon, the counter fell by nine sen to RM2.22, with 8.17 million shares traded.



According to BERNAMA News Agency, in a note today, CIMB Securities Sdn Bhd projected the company to see a three-year (2023-26F) net profit compound annual growth rate (CAGR) of 18.2 percent. Its projection is based on a 29.7 percent growth in its outlets to 3,276 by end-2026F, positive same-store sales growth, better operating leverage, and growth in other operating income streams.



CIMB Securities noted, “We expect 99 Speed Mart’s earnings growth to be primarily driven by new outlet additions and forecast the addition of 750 new outlets in Malaysia by the end of financial year (FY) 2026. Adopting an asset-light model, these new outlets will benefit from favourable demographics and inelastic demand for essential goods.”



The company plans to focus its expansion efforts in regions with lower outlet penetration rates, primarily targeting the East Coast and East Malaysia, to reduce market saturation. “Overall, we expect 99 Speed Mart to post a three-year store expansion CAGR of 11.2 percent (2023-26F),” the note added.



As of the third quarter of 2024, 99 Speed Mart operates 2,697 outlets nationwide under the 99 Speedmart brand. Given these projections, CIMB Securities has placed a ‘buy’ call on 99 Speed Mart, Malaysia’s largest mini-market retailer, with a target price of RM2.60.