99 Speed Mart Retail Holdings Bhd had a strong start on Bursa Malaysia’s Main Market, opening at RM1.85 per share, which is 20 sen higher than its IPO price of RM1.65. The company raised RM2.36 billion through its IPO, making it the largest listing in Malaysia in seven years.
According to UOB Kay Hian Research (UOBKH Research), 99 Speed Mart’s leading market position is driven by steady demand, a successful track record, and a cash-generating business model. The company holds 40% of the mini-market segment and 11.6% of the overall grocery-based retail market, valued at RM23 billion and RM79.5 billion, respectively. This puts 99 Speed Mart far ahead of its competitors, with almost three times the market share of its nearest rival.
UOBKH Research highlighted the company’s strong value proposition, convenient locations, and steady customer foot traffic, which have contributed to a 6.6% average same-store sales growth (SSSG) over the past four years. The brand is well-known among Malaysian households for offering affordable daily necessities.
The mini-market segment is expected to grow by 10% from 2023 to 2028, supported by consumer demand for convenience and modern shopping experiences. UOBKH Research also noted potential for further market share gains, especially in under-penetrated regions like the East Coast and East Malaysia.
With 2,651 stores, 99 Speed Mart has the largest store network in the mini-market sector, significantly outpacing competitors like Econsave, Bila-bila mart, and Giant Mini.
UOBKH Research has a “buy” recommendation for 99 Speed Mart, with a target price of RM2.00, based on 30 times the projected 2025 price-to-earnings ratio (PE). They forecast the company’s free cash flow to grow at an 18.8% compound annual growth rate (CAGR) from 2022 to 2026, driven by store expansion, steady SSSG, and strong brand recognition.
Similarly, Hong Leong Investment Bank (HLIB) gave a “buy” rating with a target price of RM1.98, citing the company’s market leader status and aggressive store growth. Although the company has committed to a 50% dividend payout policy, the dividend yield at the IPO price is relatively low at 1.8%. HLIB expects revenue and net profit to grow at a CAGR of 13.1% and 15.8%, respectively, from FY23 to FY26, supported by the opening of 250 new outlets annually.
