KUALA LUMPUR (Aug 18): Analysts remained positive on 99 Speed Mart Retail Holdings Bhd (KL:99SMART), betting that its expanding store network and demand for everyday essentials will keep earnings growing even as consumers remain cautious.
The mini-market operator is also expected to continue benefitting from the government cash aid under the Sumbangan Asas Rahmah (Sara) programme, while newer initiatives such as bulk sales and a broader product range are additional avenues for growth.
RHB Research said 99 Speed Mart’s first half results were within expectations, supported by strong sales and cost control despite higher wages. It maintained its 'buy' call and RM4.02 target price.
The research house expects sales volumes to remain resilient given the group’s focus on essential goods and the accessibility of its outlets. Around 3,000 of its stores are registered under Sara, putting the retailer in a strong position to capture spending under the programme.
RHB also sees limited impact from supply disruptions and cost inflation arising from the Middle East conflict, and expects input costs to remain stable.
It expects longer-term growth to be supported by a broader product offering, expansion of the bulk-sales platform and overseas growth. The group continues to target 250 new stores a year in Malaysia, while its China venture remains at an experimental stage.
Hong Leong Investment Bank (HLIB) Research was similarly upbeat, maintaining its 'buy' recommendation and RM4.24 target price as it expects 99 Speed Mart’s extensive store network and cost efficiencies to support earnings.
HLIB expects the new distribution centre in Semenyih, commissioned in July, to strengthen 99 Speed Mart’s supply-chain efficiency for about 180 surrounding outlets.
The retailer is also rolling out home appliances across its stores and bulk-sales platform, alongside instalment plans aimed at making the products more affordable. HLIB expects these initiatives to support sales while energy-efficiency measures help cushion margins against cost pressures.
CIMB Securities, however, took a more cautious view. While it expects earnings to strengthen in the second half of the year on further store openings and resilient demand for essentials, it said much of 99 Speed Mart's defensive appeal is already reflected in its share price.
It maintained its 'hold' call but raised its target price to RM3.50 from RM3.40.
CIMB expects the fourth quarter to benefit from year-end festive spending, while 99 Speed Mart's focus on affordable essential goods could also benefit as consumers trade down and spend more on food and other goods for consumption at home.
However, it cautioned that the boost from Sara could moderate as more retailers join the programme, increasing competition for the government-aid spending.
There are 12 'buy' calls, three 'hold' and one 'sell' in Bloomberg’s consensus. The average 12-month target price is RM3.99.
For the second quarter ended June 30, 2026, 99 Speed Mart’s net profit rose 13.36% year-on-year to RM163.95 million, as revenue grew 13.59% to RM3.08 billion on higher customer traffic from its expanding store network.