Hong Leong Investment Bank Bhd (HLIB) has maintained a BUY call on 99 Speed Mart Retail Holdings Bhd with an unchanged target price of RM4.24, saying strong 1Q26 earnings momentum, robust same-store sales growth and improving margins underpin its positive outlook while highlighting continued store expansion, cost efficiency gains and potential demand support from rakyat friendly measures ahead of a possible early GE16.
The research house said 99 SMart delivered a strong 1Q26 performance with revenue of RM3.1 billion, slightly lower by 0.2% quarter-on-quarter but up 17.5% year-on-year, while core net profit rose to RM188.4 million, increasing 21.4% quarter-on-quarter and 33.6% year-on-year. It added that performance was driven by a higher margin product mix, network expansion and resilient consumer demand.
HLIB noted that same-store sales growth strengthened significantly to 11.1% in 1Q26 compared with 1.7% a year earlier, while transaction volumes climbed 18% to 141.1 million, reflecting sustained footfall across its nationwide retail network.
The research house highlighted that 99SMart continues to expand its footprint steadily, adding 48 stores in Malaysia and one in China year-to-date while maintaining its target of 250 new stores in FY26. It said this expansion strategy supports a long-term compound annual growth rate of 10.2% between FY21 and FY26.
HLIB also pointed to improving cost efficiency, noting the group’s continued rollout of solar panels across outlets and distribution centres, which has contributed to margin expansion of 1.1 percentage points quarter-on-quarter and 0.6 percentage points year-on-year.
It added that the group could benefit from a potential early general election scenario, where additional rakyat friendly measures such as targeted assistance schemes may boost consumer spending. Given its extensive nationwide footprint and wide range of essential goods, 99 SMart is well positioned to capture incremental demand.
The bank said outlook remains constructive for FY26, supported by resilient demand for consumer staples, ongoing outlet expansion and strong operational scale, adding that the group has not flagged any operational concerns despite external geopolitical headwinds.
As of 11.17 am, 99 Speed Mart’s shares slip 0.56% to RM3.54.
