KUALA LUMPUR (Sept 2): 99 Speed Mart Retail Holdings Bhd, which is set to list on the Main Market of Bursa Malaysia on Sept 9, posted a 66.3% year-on-year jump in its second quarter net profit, driven by higher sales from its expanded number of outlets and higher other operating income.

Its net profit for the March to June quarter (2QFY2024) rose to RM125.53 million from RM75.49 million in 2QFY2023, its bourse filing showed.

Almost half of its profit from operations of RM476.94 million in 2QFY2024 comprised other operating income, which mainly consists of products display fees, incentives fees, distribution centre (DC) fees, and advertising and promotional fees.

Its other operating income grew 23.5% to RM237.4 million, primarily due to an upward adjustment of the DC fee rate charged on suppliers for the handling of products starting from the first quarter.

Revenue for 2QFY2024 rose 8.2% to RM2.42 billion from RM2.24 billion in 2QFY2023, following positive contributions from 59 new outlets during the quarter, bringing the group's total outlet count to 2,646 as at June 30, 2024.

Correspondingly, total transactions rose by 12.9% to 113.8 million transactions in 2QFY2024 compared to 2QFY2023. "This was partially offset by a lower average basket size, which [was] reduced by 4.2% to RM21.30," 99 Speed Mart said in a filing with Bursa Malaysia on Monday.

No dividend was declared for the quarter.

For the first half of the year (1HFY2024), 99 Speed Mart recorded a net profit of RM258.87 million, up 41.7% from RM182.64 million in the same period last year, as revenue climbed 8.6% to RM4.84 billion from RM4.46 billion.

Overall, the mini market chain operator saw a net addition of 123 outlets in 1HFY2024.

"Our strong financial performance, driven by strategic outlet expansion and successful launch of our e-commerce bulk sales platform, underscores our commitment to provide greater convenience and value to our customers," said 99 Speed Mart's founder and chief executive officer Lee Thiam Wah in a statement.

99 Speed Mart's listing is set to be Malaysia's largest initial public offering (IPO) in seven years, with an aim to raise a total of RM2.36 billion, including RM1.7 billion from an offer for sale of 1.028 billion shares by Lee and his wife Ng Lee Tieng.

The IPO's public issue of 400 million new shares would raise up to RM660 million, which the group has set aside 59% to expand its network of outlets, 15% to set up new distribution centres, 8.3% to buy delivery trucks and 7.2% to upgrade existing outlets.

"With the listing, we are excited about the new opportunities it will unlock, enabling us to accelerate our growth trajectory. The proceeds from the listing will be strategically utilised to expand our market presence and solidify our market-leading position in the mini-market industry in Malaysia," Lee added.

Upon listing, 99 Speed Mart is expected to command a market capitalisation of RM13.86 billion based on an enlarged issued share capital of 8.4 billion shares at RM1.65 per IPO share.

The IPO has been oversubscribed by 3.04 times.

CIMB Investment Bank is the IPO’s principal adviser, sole bookrunner, sole managing underwriter, and joint underwriter. Affin Hwang Investment Bank and RHB Investment Bank are joint underwriters.