NOTE THAT 99 Speed Mart Retail Holdings Bhd (99SMART) delivered a solid start to financial year 2026, with first-quarter earnings coming in within expectations on the back of strong sales momentum, aggressive outlet expansion and disciplined cost management.
The minimarket chain continued to benefit from resilient consumer demand, supported by longer operating hours and higher spending under the Sumbangan Asas Rahmah (SARA) programme, reinforcing its defensive earnings profile amid broader market uncertainties.
Analysts also noted that the group’s valuation has become increasingly attractive following recent market weakness, while its expansion strategy and growing market penetration are expected to underpin earnings visibility moving forward.
Quarter one 2026 (1Q26) results met expectations underpinned by an exciting sales momentum and disciplined cost control. Valuation is looking more palatable now given 99 Speed Mart Retail Holdings’ resilient fundamentals to offer earnings visibility amidst the ongoing market challenges.
The promising earnings growth will be supported by the increased budget allocation for Sumbangan Asas Rahmah (SARA) and robust outlet expansion to deepen market penetration.
Year-on-year (YoY), 1Q26 revenue jumped 18% to MYR3.1 bil, spurred by the net addition of 253 stores and SSSG of 11.1% (longer operating hours and SARA programme boost, which now accounts for 5% of the total sales).
1Q26 gross profit margin (GPM) expanded by 1.1ppts on growing economies of scale. Consequently, profit before tax margin expanded by 0.8ppts to 8.1%, reflecting improved operating leverage with opex/revenue moderating to 12.3%.
On the implications of the Middle East conflict, management has neither observed nor foreseen any material cost pressures and supply chain disruptions in the immediate term.
That said, any cost increases will be passed on to consumers to conserve its GPM. Meanwhile, the rising electricity tariff is mitigated by optimisation efforts whilst the spike in diesel expenses is covered by the Government’s subsidy programme.
Consumer behaviour has not changed significantly but management is seeing a more conservative spending pattern.
Outlet expansion target remains at 250 stores pa for Malaysia and management is looking to add less than 10 outlets in China (six outlets currently) as the venture is still at an experimental stage.
Beyond the near term, earnings growth will be sustained by 99SMART’s strategies to expand its addressable markets – diversifying its sourcing options to enhance its product offering, developing its bulk sales platform and expanding beyond Malaysia.
“Downside risks to our recommendation include reputational or brand risks, and unfavourable changes in the SARA programme,” said RHB.—May 19, 2026
Main image: 99 Speed Mart Sdn Bhd
