KUALA LUMPUR (Sept 24): Shares of 99 Speed Mart Retail Holdings Bhd (KL:99SMART) extended their rally on Tuesday, lifting the grocery chain listed just two weeks ago into the country’s top 30 stocks.
99 Speed Mart climbed as much as 11% or 22 sen to RM2.21 in the morning trade, making it the 28th largest stock on Bursa Malaysia, above AMMB Holdings Bhd (KL:AMBANK) and Malaysia Airports Holdings Bhd (KL:AIRPORT). The gains also propelled 99 Speed Mart above the consensus target price for its stock.
At market close, the stock pared its gains to settle at RM2.16 — up 8.5% or 17 sen, slipping to the 31st spot with a market cap of RM18.14 billion.
It was the most actively traded stock after 64.67 million shares changed hands.
“I reckon it is the foreign investors that are driving up the prices today,” said MIDF Amanah Investment Bank analyst Royce Tan. “Valuation looks quite stretched for now” at about 32 times FY2025’s earnings, “which could be why our local investors have been net selling”, he noted.
The research house, however, does not cover 99 Speed Mart.
The consensus 12-month target price for the stock is RM2.12 based on the average of four research houses, according to Bloomberg. All four have "buy" calls on 99 Speed Mart.
The stock has surged some 33% against its blockbuster initial public offering price of RM1.65 per share on Bursa Malaysia’s Main Market, outperforming its peers in the consumer sector as well as the FBM KLCI.
Still, its market capitalisation has to rise to 25th or above by the review cut-off date on Nov 25 in order to be admitted as a constituent of the KLCI in the semi-annual review, according to FTSE Russell, which maintains the 30-stock index.
“If everything remains status quo, 99 Speed Mart needs to climb to at least RM2.47 to take on the 25th spot in terms of market cap,” said MIDF’s Tan. “Not too far from where it is right now.”
At the current price level, 99 Speed Mart will be included in the reserve list comprising five largest non-constituents of the index. AMMB, Dialog Group Bhd (KL:DIALOG), Gamuda Bhd (KL:GAMUDA), IOI Properties Group Bhd (KL:IOIPG) and Malaysia Airports are in the current reserve list.
MIDF has previously flagged 99 Speed Mart does not qualify for fast entry as a new issue into FBM Index series based on current rules.
The FBM Index Series, including the KLCI, allows for fast-entry inclusion for a large newly listed stock if its market cap amounts to 2% or more of the full market cap of the FBM EMAS Index. At its IPO price of RM1.65, 99 Speed Mart’s market cap was only 0.8% of the entire FBM Emas.