99 SPEEDMART

• Lee LYG Holdings (51.5%)
• Lee Thiam Wah (28.2%)
• EPF (5.4%)

• We maintain our BUY recommendation on 99 Speedmart with a higher TP of RM2.90, based on target PE of 35x FY26F. We continue to favour 99 Speedmart for their dominant market share in the mini-market segment and strong bargaining power. We raise our target PE multiple to 35x-2SD above its historical average since listing—to reflect the scarcity premium of a consumer staple like 99, which has a resilient prospect amid an uncertain macro environment. We have raised our earnings forecast for FY25F/26F/FY27F by 4.2%/6.0%/6.2% respectively as we expect stronger quarters ahead. 1HFY25 results were within expectations with a solid 3.7% SSSG, while the outlook remains bright with extended operating hours and PMX’s recently announced relief measures.
• Maintain BUY for resilient earnings and prime policy beneficiary. We maintain our BUY call with a higher TP of RM2.90, based on a target PE of 35x FY26F. We raise our target PE multiple to 35x—2SD above its historical average since listing—to reflect the scarcity premium of a consumer staple, which has a resilient prospect amid an uncertain macro environment. We have raised our earnings forecast for FY25F/26F/FY27F by 4.2%/6.0%/6.2% respectively (Exhibit 2) as we expect stronger quarters ahead.
• Slightly ahead. 1HFY25 core net profit (CNP) rose 12.5% YoY to RM300.9mil, accounting for 50% and 51% of our and consensus full-year estimates, respectively. We deem the results slightly above expectations as we expect stronger quarters ahead, to be driven by government relief measures and store expansion. Revenue grew 9.8% YoY, broadly in line with outlet growth. Gross profit margin improved slightly to 12.0% (+0.3ppt YoY), helping to cushion the impact of higher staff costs following the minimum wage adjustment. 2QFY25 CNP rose a robust 19.2% YoY, underpinned by stronger consumer purchasing power following the minimum wage hike and government social assistance initiatives.
• Robust SSSG; longer operating hours to lift sales. In 1HFY25, SSSG remained strong at +3.7%, underpinned by a 10.5% YoY increase in transaction volume. The average basket size was stable at RM21.40. A positive development – effective 1 July 2025, the group extended operating hours nationwide, with outlets now opening an additional hour earlier from 9:00 AM, which is expected to further support SSSG.
• Prime beneficiary of PMX relief measures. 99 Speedmart is poised to be the prime beneficiary of the cost-of-living relief measures announced by PMX on 23 July 2025, which will provide at least RM2.8bil in direct disposable income support. This should underpin short-term consumption, particularly among lower- and middle-income groups, reinforcing 99 Speedmart’s advantage as a value-focused retailer.

99 Speedmart is the largest mini market chain in Malaysia with 2,778 stores with 3,300 SKUs as of end 2024. 99 Speedmart also has 19 distribution centres and more than 600 delivery trucks to support the outlets nationwide. Based on 2023 revenue data, 99 Speedmart has a dominant market share of 40.1% in mini market industry and 11.6% within grocery-based retail industry. Their sales mix focuses on daily essentials with 72.8% in F&B, 12.7% in personal baby products and 7.7% in household products.

We have a BUY recommendation on 99 Speedmart with target price of RM2.90. We like 99 Speedmart for the business moat that the company has established due to its dominant market share in the mini-market segment and strong bargaining power, aggressive store expansion plan and inclusion into FBMKLCI.

The stock is valued based on a target 35x FY26F PE. The target PE is based on two standard deviations above its historical average since listing—to reflect the scarcity premium of a consumer staple, which has a resilient prospect amid an uncertain macro environment.

Downside risks include delays to expansion plan and new entrances such as Giant which has introduced smaller store format, Giant Mini and Super 7.

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