CIMB: Sales boost for 99 Speed Mart with longer hours
KUALA LUMPUR: 99 Speed Mart Retail Holdings Bhd is set to increase sales by standardising longer operating hours at all its outlets nationwide, said CIMB Securities Sdn Bhd.
The firm noted that the extended hours will enhance customer convenience and drive higher revenue per outlet.
"This will support our annual same-store sales growth forecast of 1.4 per cent for financial years 2025 to 2027 (FY25–27), with growth already tracking at 1.7 per cent in the first quarter of 2025," it said in a note.
The mini-market operation recently announced that all its outlets nationwide will start opening earlier, from 9am to 10am daily, effective July 1. The move is in line with its goal of enhancing customer convenience and adapting to evolving shopping patterns.
CIMB noted that about 80 per cent to 85 per cent of 99 Speed Mart's 2,883 outlets had already been following the revised operating hours for nearly a year.
The recent announcement, it said, formalises the standardisation of these hours across all locations.
"Assuming that 15 per cent to 20 per cent of the company's outlets will be positively affected by the one-hour extension to operating hours, we estimate a potential topline uplift of 1.0 per cent to 1.2 per cent in FY25–27," the firm added.
CIMB Securities said it is maintaining its earnings per share forecasts for FY25–27, along with its "Buy" rating and target price of RM2.60 for 99 Speed Mart.
The firm said the company's current premium price-to-earnings (P/E.) valuation of 32 times, compared to the consumer sector average of 28 times, is justified.
This is supported by 99 Speed Mart's stronger earnings growth prospects with a three-year compound annual growth rate of 14.3 per cent from 2024 to 2027, a superior return on equity (ROE) of 32–34 per cent for FY25-27 and its dominant market share in Malaysia's mini-market retail segment.
The firm noted that the downside risks include weaker-than-expected consumer sentiment, increased competition leading to weaker-than-expected sales and a sharp dip in gross profit margins due to a ramp-up in promotional activities or stiffer competition.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
a day ago
- The Sun
Auto sector to have minimum impact from SST expansion
KUALA LUMPUR: CIMB Securities Sdn Bhd has projected the upcoming Sales and Service Tax (SST) expansion in July 2025 to have a limited direct impact on the automotive sector. In a research note, it said vehicle sales are already subject to a 10 per cent sales tax, while maintenance and repair services incur an 8.0 per cent service tax. 'That said, there may be a slight increase in dealership and showroom rental costs due to the measure, although we believe the impact will be minimal. 'Indirectly, however, weaker consumer sentiment could weigh on new vehicle sales in the second half of 2025 (2H 2025),' it said. The Malaysian Automotive Association (MAA) has reportedly projected a 4.5 per cent year-on-year (y-o-y) decline in total industry volume (TIV) to 780,000 units in 2025, attributing this to demand normalisation and a reduced industry order backlog. CIMB Securities has, however, forecasted a sharper 7.0 per cent y-o-y decline in TIV to 760,000 units, due to potential headwinds from the planned removal of the RON95 petrol subsidy in 2H 2025, which Prime Minister Datuk Seri Anwar Ibrahim has affirmed will proceed as part of the government's subsidy rationalisation. 'Despite this, we expect demand in the sub-RM100,000 segment to remain resilient, supported by national brands and selective entry-level Japanese models. 'We project national brands to retain a dominant 64.5 per cent market share in 2025, with non-national marques accounting for the remaining 35.5 per cent,' it said. CIMB Securities also believed the removal of fuel subsidies could accelerate battery electric vehicle (BEV) adoption. BEV sales nearly doubled y-o-y in 1Q 2025 to 5,394 units from 2,703 units a year ago, with combined BEV and hybrid penetration rising 1.9 percentage points y-o-y to 7.3 per cent. 'With full duty exemptions for imported electric vehicles (EVs) set to expire by end-2025, and the government unlikely to extend it beyond the Dec 31, 2025 deadline, we expect a potential spike in EV demand in 4Q 2025 as buyers rush to benefit from tax savings,' it said. CIMB Securities has maintained its 'Neutral' rating on the sector due to a subdued growth outlook amid intensifying market competition.
The Sun
a day ago
- The Sun
Auto sector to have minimum impact from SST
KUALA LUMPUR: CIMB Securities Sdn Bhd has projected the upcoming Sales and Service Tax (SST) expansion in July 2025 to have a limited direct impact on the automotive sector. In a research note, it said vehicle sales are already subject to a 10 per cent sales tax, while maintenance and repair services incur an 8.0 per cent service tax. 'That said, there may be a slight increase in dealership and showroom rental costs due to the measure, although we believe the impact will be minimal. 'Indirectly, however, weaker consumer sentiment could weigh on new vehicle sales in the second half of 2025 (2H 2025),' it said. The Malaysian Automotive Association (MAA) has reportedly projected a 4.5 per cent year-on-year (y-o-y) decline in total industry volume (TIV) to 780,000 units in 2025, attributing this to demand normalisation and a reduced industry order backlog. CIMB Securities has, however, forecasted a sharper 7.0 per cent y-o-y decline in TIV to 760,000 units, due to potential headwinds from the planned removal of the RON95 petrol subsidy in 2H 2025, which Prime Minister Datuk Seri Anwar Ibrahim has affirmed will proceed as part of the government's subsidy rationalisation. 'Despite this, we expect demand in the sub-RM100,000 segment to remain resilient, supported by national brands and selective entry-level Japanese models. 'We project national brands to retain a dominant 64.5 per cent market share in 2025, with non-national marques accounting for the remaining 35.5 per cent,' it said. CIMB Securities also believed the removal of fuel subsidies could accelerate battery electric vehicle (BEV) adoption. BEV sales nearly doubled y-o-y in 1Q 2025 to 5,394 units from 2,703 units a year ago, with combined BEV and hybrid penetration rising 1.9 percentage points y-o-y to 7.3 per cent. 'With full duty exemptions for imported electric vehicles (EVs) set to expire by end-2025, and the government unlikely to extend it beyond the Dec 31, 2025 deadline, we expect a potential spike in EV demand in 4Q 2025 as buyers rush to benefit from tax savings,' it said. CIMB Securities has maintained its 'Neutral' rating on the sector due to a subdued growth outlook amid intensifying market competition.
New Straits Times
a day ago
- New Straits Times
Tax expansion poses limited direct impact on auto sector
KUALA LUMPUR: The upcoming expansion of the service tax scope, effective next month, will have a limited direct impact on Malaysia's automotive sector, according to CIMB Securities Sdn Bhd. The firm said this is because vehicle sales are already subject to a 10 per cent sales tax, while maintenance and repair services incur an eight per cent service tax. "That said, there may be a slight increase in dealership and showroom rental costs due to the measure, although we believe the impact will be minimal. "Indirectly, however, weaker consumer sentiment could weigh on new vehicle sales in the second half of 2025 (2H25)," it added. CIMB Securities also highlighted that the Malaysian Automotive Association has forecast a 4.5 per cent year-on-year (YoY) decline in total industry volume (TIV) to 780,000 units in 2025. This is attributed to demand normalisation and a reduced industry order backlog. The firm said MAA also flagged global economic uncertainty, exacerbated by US-China trade tensions, as a risk to Malaysia's economic outlook. In addition, the government has postponed the implementation of the revised open market value (OMV) calculation from January 2025 to January 2026. CIMB Securities views this delay as a short-term positive for the sector, as the new OMV formula could raise the average selling price of locally assembled vehicles by 10–30 per cent, based on MAA estimates. The firm also expects a sharper seven per cent YoY decline in TIV to 760,000 units, mainly due to potential headwinds such as the planned removal of the RON95 petrol subsidy in 2H25. "Despite this, we expect demand in the sub-RM100,000 segment to remain resilient, supported by national brands and selected entry-level Japanese models. "The government's plan, outlined in Budget 2025, to retain subsidies for at least 85 per cent of RON95 users should help cushion the impact and support affordability in the mass-market segment. "Consequently, we project national brands to retain a dominant 64.5 per cent market share in 2025, with non-national marques accounting for the remaining 35.5 per cent," it said. Furthermore, CIMB Securities believes the removal of fuel subsidies could further accelerate battery electric vehicle adoption. The firm also expects a potential spike in electric vehicle (EV) demand in the fourth quarter of 2025 as buyers rush to benefit from tax savings. Full duty exemptions for imported EVs are set to expire by the end of 2025, and the government is unlikely to extend them beyond the December 31, 2025 deadline. "Within our coverage, Sime Darby Bhd is well-positioned to ride this wave, supported by its expanding EV line-up across brands like BMW, Mini, Porsche, BYD, and Volvo," it said. Overall, CIMB Securities has maintained a "Neutral" rating on the auto sector due to a subdued growth outlook amid intensifying market competition. It noted that Sime Darby remains its top sector pick, supported by earnings recovery in the Australian mining sector, a broad EV portfolio, its stake in Malaysia's auto market leader Perodua, and the potential monetisation of non-core and land bank assets. Moving forward, the firm said key catalysts for the sector include the strengthening of the ringgit against the US dollar and Japanese yen, a reduction in interest rates, and favourable government policies aimed at reviving domestic demand. Key downside risks to its call include depreciation of the ringgit, interest rate hikes, and weaker consumer sentiment stemming from the potential subsidy rationalisation programme and new taxes.
