RHB views 99 Speed Mart Retail Holdings as the prime beneficiary of the growing SARA initiative, as the preferred fiscal support programme, which should lead to earnings upside and further valuation rerating.
Outlet expansion to penetrate underserved regions will continue to anchor steady 3-year earnings growth of 15%. As one of the major distributors, 99SMART should also see volume growth driven by the normalising sentiment on Nestle brands.
Although the budget allocations for key social assistance programmes STR and SARA remained at MYR15 bil in Budget 2026, we noticed an increased allocation for SARA at the expense of STR.
The shift is positive to the sector by directing more spending onto groceries and daily necessities, hence translating to better sales volume for large-cap consumer staple companies including 99SMART.
“Our observation suggests 99SMART is garnering strong market share under the SARA programme, thanks to its entrenched store network and brand equity,” said RHB.
RHB estimates that more than 1400 99SMART stores have been enrolled for SARA, out of a total of c.5700 stores listed on the MyKasih website. 99SMART is well-positioned to benefit from the rising disposable income of lower income groups, as well as the downtrading consumption trends as a result of elevated inflationary pressures.
This is considering its extensive store network and consumer preference for mini-markets to shop for groceries. Meanwhile, RHB believes earnings growth over the longer term will be sustained by 99SMART’s strategies to expand its addressable markets.
These include diversifying its sourcing options to enhance its product offerings, and developing its bulk sales platform to entice customers it is unable to serve well enough with the retail model.
Downside risks to RHB’s recommendation include reputational or brand risks, and a structural switch in consumer preferences. —Oct 15, 2025
Main image: 99 Speed Mart
