KUALA LUMPUR (Sept 3): CIMB Securities said 99 Speed Mart Retail Holdings Bhd's (KL:99SMART) recent expansion to China, which is seen as a test for diversifying beyond its saturated Malaysian market, can be well supported by its strong cash pile.
The conveniece store chain opened its debut outlet in Fuzhou, Fujian Province, China on Aug 31.
“While execution risks exist in China’s competitive retail landscape, 99 Holdings’ strong net cash balance of RM836 million as of the end of the second quarter of 2025 provides financial flexibility without overstretching its balance sheet,” CIMB Securities said in a note on Wednesday.
CIMB Securities, which maintained its target price at RM2.80, expects the Fuzhou store to have “minimal near-term financial impact". Shares of 99 Speed Mart rose four sen or 1.6% to RM2.54 at the time of writing.
The research house is keeping its FY2025-FY2028 earnings per share forecasts unchanged for now, pending further updates on the development.
CIMB Securities said the debut outlet in China, launched under the “99 Mini-Mart” brand, mirrors the Malaysian format but will be adapted to local culture and preferences.
The Fuzhou store is expected to follow the same “NEAR n’ SAVE” strategy used at home, it added.
In a consumer note, the research house noted that while Fujian is a competitive market — where 99 Speed Mart will face market peers like 7-Eleven, FamilyMart and Yonghui Superstores — its population of 41.9 million still offers significant market potential. If 99 Speed Mart were to expand there at the same density as in Malaysia, the province alone could support more outlets than the company currently operates in its home market, it added.
As of end-June, 99 Speed Mart has established 2,894 outlets across Malaysia.
Analysts are generally upbeat on this development. Of the 11 analysts covering the stock, nine have ‘buy’ calls — including CIMB Securities — while one has a ‘hold’ rating and one a ‘sell’ recommendation, according to Bloomberg.
Despite 99 Speed Mart’s plans for progressive expansion in Fuzhou, CIMB Securities expects store openings in China to remain gradual, likely below 40 outlets over the next two years as initial start-up losses pose only “limited downside risk”.