Background

Founded 2 decades ago, 99 Speedmart Retail Holdings Berhad (99 Speedmart) is now a leading mini-market player in Malaysia, offering a product portfolio that includes food and beverages, personal and baby care products, as well as household products.

IPO Statistic

The IPO entails a public issue of 400.0mn new shares and an offer for sale of 1,028.0mn existing shares. Collectively, these share offers account for 17.0% of the group’s enlarged issued share capital.

Competitive Advantages

1. Leading Mini-Market Retailer in Malaysia

2. Efficient Distribution Supported by Nationwide Network of Distribution Centres (DCs)

3. Competitive Prices

Valuation

We assigned a PE of 29x FY25 EPS to derive a fair value of RM1.71/share for 99 Speedmart. We believe that the PE of 29x, representing a 10% premium over the weighted average PE of selected stocks in the Bursa Malaysia Consumer Products Index, is justifiable due to the group’s dominant position in the Malaysian retail sector, evidenced by its extensive network of over 2,500 outlets and strong brand recognition. Additionally, the group’s consistent revenue growth, operational efficiency, strong financial performance, and strategic expansion in the growing convenience store market support a premium valuation. Not Rated.

Source: TA Research - 22 Aug 2024