PETALING JAYA: 99 Speed Mart Retail Holdings Bhd
has the potential to unlock further earnings growth by broadening its product range through more diversi- fied sourcing, including electrical appliances at selected outlets, according to Apex Research.
The research house sees opportunities for the group to scale up its bulk sales platform and expand beyond Malaysia to tap new growth markets.
99 Speed Mart is the country’s largest homegrown mini-market operator with 3,151 outlets and 22 distribution centres.
Its revenue is at a 12.3% compounded annual growth rate over the financial year 2022 (FY22) to FY25, while lifting the FY25 profit after tax and minority interest by 30.5% to RM607.3mil.
In initiating a coverage on 99 Speed Mart, Apex Research said the management is adding about 250 outlets a year, aiming for 4,250 by 2030, weighted to under-penetrated Sabah, Sarawak and the East Coast.
“We see further expansion opportunities in under-penetrated markets, alongside same-store sales (SSSG) growth,” the research house noted.
Each outlet is designed to serve a catchment of 1,500 to 2,000 households.
New outlets typically break even in under three years and take three to five years to mature, providing an additional source of revenue growth as the network expands.
Apex Research also forecasts 3,292, 3,542, 3,792 and 4,032 outlets in FY26, FY27, FY28 and FY29, respectively.
It noted SSSG accelerated from 1.4% in the third quarter of FY24 (3Q24) to 11.9% in 3Q25 before easing to 7.2% in 2Q26, while the average basket size remained broadly flat at around RM21.40 over ten quarters.
Sales growth has been driven by higher transaction volumes (up 15.7% in the first half of FY26 (1H26), supported by extended opening hours (a 3% to 5% sales uplift), the four items for RM10 promotions and an expanded government Sumbangan Asas Rahmah cash-aid programme, with the allocation increasing to RM8bil in 2026 from RM5bil in 2025.
“We therefore assume SSSG normalises to 6% in FY27 to FY29, below the 7.7% recorded in FY25 and 9.1% in 1H26, reflecting a more cautious view of underlying sales growth.
Meanwhile, the group’s operating leverage is the earnings kicker, Apex Research said, adding that the gross margin has risen to 20% (1H26) from 19% (FY24).
Furthermore, energy-efficiency spending trims utilities, and the pre-tax profit margin could potentially rise from 7% in FY25 to 7.6% by FY29 on a net-cash balance sheet.
The group also invested RM52mil in energy efficiency in FY25, and 317 outlets now have solar photovoltaic systems.
Electronic shelf pricing, centralised inventory systems and a growing distribution centre network may further improve productivity, it added.
Apex Research has a “buy” call on 99 Speed Mart with a target price of RM3.70.
Meanwhile, an analyst with a local brokerage highlighted that 99 Speed Mart remains a founder-led business, with founder and chief executive officer Lee Thiam Wah and his family controlling about 79.7% of the group.
The founder’s significant ownership provides continuity and aligns management with long-term business performance, although concentrated ownership may limit minority shareholders’ influence over corporate decisions.
“What we are watching would be on the governance, considerations including family representation on the board, recurrent related-party transactions and tax services provided to the group by firms associated with 99 Speed Mart chairman Datuk Chua Tia Guan,” the analyst noted.
While these relationships are disclosed and the chairman recuses himself from relevant matters, the analyst said independent oversight and transparent approval processes remain important safeguards for minority shareholders.
In addition, the analyst’s estimated free float of about 17% may constrain trading liquidity and index weighting.
For the 2Q ended June 30, 2026, the company saw its net profit improving by 13.4% year-on-year to RM163.9mil, in line with an almost identical improvement in topline to RM3.08bil.
