KUALA LUMPUR: 99 Speed Mart Retail Holdings Bhd, Malaysisa's biggest initial public offering (IPO) in seven years, opened at RM1.85, a 12 per cent premium to its IPO price of RM1.65 a share, on its first day of listing on the Main Market of Bursa Malaysia.
As at 9.06am, 1.32 million shares changed hands.
99 Speed Mart Holdings listed with a market capitalisation of RM13.9 billion.
This is based on the final retail price of RM1.65 and its enlarged share capital of 8.4 billion shares.
As at 10.18am, it was trading 15 per cent higher at RM1.90 a share, with some 291 million shares changing hands.
Through the IPO, the company raised a total amount of RM660 million through the public issue if 400 million new shares.
Executive director and chief executive officer Lee Thiam Wah said as the company transitions to being a public listed entity, it will amplify efforts to create greater value for all stakeholders.
"We will be steadfast in our commitment to build the company further. These funds will be the catalyst behind our expansion plans as we increase the number of outlets across Malaysia and support growth by establishing new distribution centres, purchasing delivery trucks and upgrading existing outlets," he said in his speech today.
99 Speed Mart Holdings currently has more than 2,600 outlets nationwide.
It intends to open 250 new outlets annually and reach a target of 3000 outlets operating nationwide by end-2025.
It also plans to open two new distribution centres in Sarawak and Selangor by end of this year and next year respectively.
By 2027, the company aims to operate at least 25 distribution centres.
Alternate director Albert Lee said the move is in line with its nationwide expansion plans.
"We also hold a positive outlook for other opportunities across Southeast Asia but that is not in the plans for now," he told a press conference.
Lee said with the listing, the company will also focus on the operations of its online sales platform for bulk sales business services.
That segment has recorded about 6,400 transactions and RM7.5 million sales since its launch in September last year up to July 15, 2024.
Commenting on the mart's absence in Kelantan, Lee said the company is slowly making its ways into the state.
"We do not have store in Kelantan for now but we will slowly branch out in terms of distribution centres. We have secured a foothold in Terengganu so hopefully Kelantan will be quite soon," he added.
As at June 30, 2024, the company assets stood at RM2.84 billion.
Hong Leong Investment Bank initiated coverage on 99 Speed Mart with a BUY call and target price of RM1.98 based on 30 times price to earnings (PE) ratio on FY25 earnings.
It said, while this PE implies a ~40 per cent premium to 99 Speed Mart's peers, it believes it is warranted on the back of its market leader position coupled with aggressive store expansion.