PETALING JAYA: 99 Speed Mart Retail Holdings Bhd is slated to be one of the key beneficiaries in the upcoming Budget 2027’s potential step-up in its cost-of-living aid programme.
This is in line with the group’s dominant and expanding staples-led convenience footprint via 21% of all Sumbangan Asas Rahmah (Sara)-eligible stores.
AmBank Research, which re-initiated a “buy” call on the stock with a target price (TP) of RM4.25, pegs 99 Speed Mart to a target 2027 to 2028 price-to-earnings ratio of 40 times, a premium given its 15% core earnings compounded annual growth rate.
“We think this is justified by 99 Speed Mart’s unique position as the key beneficiary of government cash aid, a thinning free -float % that limits de-rating risk and a staples-led value model increasingly prioritising quality of expansion pace,” the research house said in a note to clients.
AmBank Research believes the market is pricing in only a modest step-up from the previous Sara payouts, despite continuous hints that subsidies and cost-of-living relief will be key Budget 2027 focus areas.
99 Speed Mart’s network accounts for about 21% of Sara stores.
“We predict a higher (over 21%) of Sara spend, given its dominant, expanding footprint in the ultra-local convenience space”.
Despite an aggressive store rollout that has left 94% of outlets within 3km of one another, AmBank Research noted that cannibalisation has proven a far smaller drag than store density alone would suggest.
This is reinforced by the persistent trade-down behaviour pushing consumers to shift to value formats, where 99 Speed Mart dominates with its “affordable and convenient” model.