99 SPEED MART RETAIL HOLDINGS BERHAD

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***Disclaimer***Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision.

Open to apply: 15 Aug 2024
Close to apply: 23 Aug 2024
Price Determination Date: 27 Aug 2024
Balloting: 29 Aug 2024
Listing date: 09 Sep 2024

Share Capital (might differ depend on final determination price) 
Market cap: RM13.860 bil
Total Shares: 8.40 bil shares
1st day listing tradable shares: 1.428 bil shares

Industry CARG 
Grocery-based Retail Industry in Malaysia, 2022–2028F (sales value)
Hypermarket: 5.3%
Supermarket: 6.4%
Mini-market: 5.4% 
Convenience stores: 10.9%
Other grocery –based retailers: 4.0%

Industry competitors comparison (profit before tax margin %)
1. 99 Speedmart: 5.8%
2. 7-Eleven : 0.8%
3. KK supermart: 10.4%
4. Mynews: -1.0%
5. Others: -2.2% to 6.0%

Business (FPE 2024) 
“99 Speedmart” chain of mini-market outlets involved in the retailing of daily necessities, with 2,542 outlets located nationwide.
Subsidiaries
1. 99SM : Retail of consumable merchandise and other household products via its network of “mini-market” outlets
2. 99EM: Retail of consumable merchandise and other household products via its network of “mini-market” outlets
3. Yiwu J-Jade Trading: Investment holding
4. Yiwu SM Import and Export: Exporting of consumable merchandise and household products

Fundamental  
1.Market: Main Market
2.Price: RM1.65 (final price will determine at 27/08/2024)
3.Forecast P/E: 34.7
4.ROE(Pro Forma III): 43.81%  
5.ROE: 78.93% (FPE2024), 73.9% (FYE2023) , 51.70%(FYE2022), 56.87%(FYE2021)
6.Net asset (Pro forma III): 0.14
7.Total debt to current asset: 1.048  (Debt: 2.036bil, Non-Current Asset: 1.309 bil, Current asset: 1.943 bil)
8.Dividend policy: 50% PAT dividend policy.
9. Shariah status: -

Past Financial Performance (Revenue, Earning Per shares, PAT%)  
2023 (FPE 31 Mar, 3mth): RM2.424 bil (Eps: 0.016), PAT: 5.5%
2023 (FYE 31Dec): RM9,240 bil (Eps: 0.048), PAT: 4.3%
2022 (FYE 31Dec): RM8.075 bil (Eps: 0.039), PAT: 4.0%
2021 (FYE 31Dec): RM7.836 bil (Eps: 0.050),PAT: 5.3%

Major customer 
Business model retail consumer. There is no single major customer. 

Major Sharesholders 
1. Lee LYG Holdings: 51.5% (direct)
2. Lee Thiam Wah:  25.7% (direct), 51.5% (indirect)

Directors & Key Management Remuneration for FYE2024 
(from Revenue & other income 2023)
Total director remuneration: RM3.335 mil
key management remuneration: RM2.20 mil – RM2.60 mil
total (max): RM5.935 mil or 0.70%

Use of funds 
1. Expansion of network of outlets: 389 mil, 58.9%
2. Establishment of new DCs: 100 mil, 15.2% 
3. Purchase of delivery trucks: 55 mil, 8.3%
4. Upgrading of existing outlets: 47.6 mil, 7.2%
5. Repayment of existing bank borrowings: 45 mil, 6.8%
6. Estimated listing expenses: 23.4 mil, 3.6%

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall is more to low risk business, but also come with low grow opportunities.

*Valuation is only personal opinion & view. Perception & forecast will change if any new quarter result release. Reader take their own risk & should do own homework to follow up every quarter result to adjust forecast of fundamental value of the company.