PETALING JAYA: Hong Leong Investment Bank (HLIB) Research remains upbeat on 99 Speed Mart Retail Holdings Bhd
, with its financial year 2026 (FY26) trajectory, supported by the group’s defensive consumer staple business and strong competitive position.
It maintained a “buy” call on the counter with an unchanged target price of RM4.24.
“We remain positive on its earnings outlook, supported by continued store expansion, improving cost efficiencies and resilient demand for essential goods.
“The group is also well-positioned to benefit from potential rakyat-friendly measures ahead of a possible early 16th General Election or GE16, given its nationwide footprint and extensive range of Sumbangan Asas Rahmah (Sara)-eligible products,” HLIB Research said.
The positive outlook follows a robust first-quarter performance in FY26, with revenue rising 17.5% year-on-year (y-o-y) to RM3.1bil, while core net profit surged 33.6% to RM188.4mil.
The stronger earnings were driven by a more favourable product mix, healthy network expansion and stronger same-store sales growth.
HLIB Research said the retailer continues to execute well on its expansion strategy, having added 48 stores in Malaysia and one outlet in China year-to-date.
Expansion has been focused on less densely penetrated markets in northern and southern regions, while management has reaffirmed its target of opening 250 new stores in FY26, representing a compound annual growth rate of 10.2% between FY21 and FY26.
Besides expanding its footprint, 99 Speed Mart is also reaping benefits from investments in cost optimisation.
The company has been progressively installing solar panels across its stores and distribution centres, helping to improve operating efficiency and contributing to higher profit margins.
According to HLIB Research, these initiatives have started bearing fruit, as reflected in a 1.1% quarter-on-quarter and 0.6% y-o-y expansion in net margin.
HLIB Research noted that additional cost-of-living assistance, similar to previous Sara initiatives, could boost spending at neighbourhood retailers.
“The firm is well-positioned to capture the bulk of any incremental consumer spending,” it said.
