99 Speed Mart: Durable Compounder or Growth Already Priced In?

RM20 here, RM20 there.

That is how 99 Speed Mart quietly built one of the most powerful retail networks in Malaysia. Across 3,037 stores, those small daily purchases now add up to roughly RM1 billion a month in revenue.

In its latest results (FY2025, ended December), revenue rose 14.5% to RM11.43 billion. Fourth-quarter revenue alone hit RM3.08 billion — comfortably above the billion-a-month pace. Core net profit grew 20.2% to RM614 million.

That is serious scale. And it gets even more interesting when you look at where the spending is coming from.

The SARA Toll Road

Under Budget 2026, the government channels a growing share of cash assistance through Sumbangan Asas Rahmah (SARA) — cashless e-credits that recipients spend at approved retailers via MyKasih.

Out of more than 10,000 stores registered in the MyKasih network, 99 Speed Mart accounts for roughly 2,000 outlets — about 20% of all approved merchants. That is more than any other single chain.

In other words, when rakyat spend on daily essentials through government aid, 99 Speed Mart is increasingly one of the biggest toll roads in town. CIMB estimates that about 65.9% of 99 Speed Mart’s total store count is now enrolled under SARA.

The Numbers Still Look Disciplined

Despite adding 259 net new stores in FY2025 alone (+9.3%), the fundamentals have held up:

Gross margins edged up. Working capital remains healthy. Inventory days tightened slightly. The 7.8% same-store sales growth is notably strong — driven by higher promotional traction, extended operating hours, and SARA-enabled footfall.

The Compounder Checklist

Apply the durable compounder lens and the picture looks compelling:

• Free cash flow positive for 5 consecutive years. This means they are able to pay for new stores using the cash flow generated from operating old stores, no need to get outside capital.
• EBIT growing at 15%+. FY2025 EBIT rose 19.7% to RM832 million, up from RM695 million.
• ROE above 20%. At 36.2% in FY2025, this is the highest among Malaysian consumer staples peers.

That is usually what you want to see in a business trying to scale without losing discipline. High returns on equity, self-funding growth, and a business model where every new store is accretive.

But Valuation Is No Longer Cheap

Here is the catch. The PE has expanded significantly since listing.

The share price has rallied nearly 140% since IPO. At 54x trailing earnings, 99 Speed Mart trades at a significant premium to the consumer staples average of ~37x. Even CIMB, which had been a buyer, downgraded to Hold in February after the 29.5% rally in three months.

99 Speed Mart’s ROE is the highest of the group. Its earnings growth is solid. But the PE premium over peers is also the widest.

What to Watch From Here

At 54x earnings, the market is no longer just paying for store expansion. Investors should be asking whether 99 Speed Mart can unlock more earnings per store.

Two areas matter:

1. Other operating income. This line includes distribution fees, product listing fees, and display fees charged to suppliers. In FY2025, it rose 15.3% — growing faster than top-line revenue. As 99 Speed Mart becomes a larger distribution platform, this income stream becomes structurally more important.

2. 99 Bulksales. Launched in September 2023, this is 99 Speed Mart’s B2B platform — currently serving the Klang Valley and southern region with bulk purchases and free delivery. It targets small retailers and enterprise buyers. If it scales nationally, it could become a meaningful second leg of growth, leveraging the same distribution network that already serves 3,000+ stores.

There’s also the SARA question. CIMB notes that while 99 Speed Mart remains a key beneficiary, “incremental sales upside from the programme may moderate as it matures from 1H26 onwards.” Broader retailer participation and fresh produce expansion could divert some spending away from FMCG-focused retailers.

The Analyst View

The Bottom Line

99 Speed Mart checks nearly every box for a durable compounder: consistent free cash flow, high returns on equity, a self-funding expansion model, and a dominant position in daily essentials retail. The SARA tailwind adds a structural layer of demand that most competitors cannot match at this scale.

But at 54x trailing earnings — more than double where it listed barely 18 months ago — the market is pricing in not just continued store rollouts, but a stronger platform, better monetisation per store, and a longer runway than peers.

The question for investors is no longer whether 99 Speed Mart can keep opening stores. It’s whether it can unlock enough earnings per store to justify the premium.

Key Financials

How We Found This

Financial data is from 99 Speed Mart’s FY2025 annual results filed on Bursa Malaysia. Peer comparison and forward estimates from CIMB Securities (15 February 2026). MyKasih and SARA store data from publicly available merchant lists. 99 Bulksales information from the company’s IPO prospectus and official website.

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