99SMART’s first half of financial year 2026 (1HFY26) core net profit of RM353 mil came in within expectations at 50% of Kenanga’s full-year forecast and 48% of the street’s estimate.
As expected, no dividend was declared during this quarter. For the full financial year, Kenanga expects the group to declare a total dividend of 5.0 sen.
1HFY26 revenue climbed 16%, underpinned by a 9% expansion in its store network to 3,151 outlets. Note that there were 2,894 outlets in 2025.
Same stall sales growth was supported by the one-off RM100 SARA cash aid and longer operating hours nationwide since July 2025, starting from 9am, while average basket size held steady at RM21.40.
Notably, 99 Bulksales continued to gain traction, contributing RM50 mil (+81% year-on-year) or 1% of group revenue.
1HFY26 core net profit grew by a sharper 22%, as stable gross profit (GP) margin and utility savings from ongoing upgrades such as more energy-efficient air-conditioning, refrigeration and lighting systems across outlets helped cushion higher staff costs and depreciation from continued network expansion.
Quarter two financial year 2026 turnover was seasonally flattish, with 65 net new outlets added during the quarter, while GP fell 3% on lower supplier promotional rebates following the double festive campaigns in the preceding quarter.
Its bottom line declined 13%, likely due to weaker cost absorption.
Management remains committed to opening 250 new outlets annually, supported by continued distribution capacity expansion, including the new 63k sq ft distribution centre in Semenyih (commissioned in July 2026), which can serve 180 outlets.
On costs, ongoing energy efficiency upgrades are estimated to yield around RM24 mil in annual utility savings, with only 50% of the store network upgraded, suggesting further savings potential.
Meanwhile, following encouraging demand from its initial rollout of Midea small home appliances in Klang Valley in April 2026, the range was expanded nationwide and introduced on 99 Bulksales in July 2026, providing an avenue to lift average basket size, albeit with limited near-term earnings contribution given the less than 1% of shelf space.—Aug 18, 2026
Main image: KLScreener
