99 SPEED MART'S SHARE PRICE LOWER DESPITE POSITIVE OUTLOOK, GROWTH STRATEGIES

KUALA LUMPUR, Jan 13 (Bernama) -- 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.

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 per cent.

Its projection is based on a 29.7 per cent 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.

“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,” it said.

It said 99 Speed Mart will focus its expansion plans in regions with lower outlet penetration rates (mainly East Coast and East Malaysia) to mitigate market saturation.

“Overall, we expect 99 Speed Mart to post a three-year store expansion CAGR of 11.2 per cent (2023–26F),” it added.

As of the third quarter of 2024, the company operates 2,697 outlets nationwide under the 99 Speedmart brand.

As such,  CIMB Securities placed a ‘buy’ call on 99 Speed Mart, Malaysia’s largest mini-market retailer, with a target price of RM2.60.

-- BERNAMA