--- title: "99 Speedmart’s IPO: What You Need to Know Before Buying Their Shares" description: "Discover the key details of 99 Speedmart’s IPO, Malaysia’s largest Initial Public Offering since 2017. Learn about its business model, financial metrics, market valuation, and growth plans. Stay informed on the benefits for the Malaysian economy and the challenges post-IPO." url: "https://www.mrmoneytv.com/articles/99-speedmart-s-ipo-what-you-need-to-know-before-buying-their-shares/" category: "Investing & Market" author: "Finlit" published: 2024-09-04 source: "Mr Money TV" --- # 99 Speedmart’s IPO: What You Need to Know Before Buying Their Shares Discover the key details of 99 Speedmart’s IPO, Malaysia’s largest Initial Public Offering since 2017. Learn about its business model, financial metrics, market valuation, and growth plans. Stay informed on the benefits for the Malaysian economy and the challenges post-IPO. ## Key takeaways - 99 Speedmart's IPO aimed to raise RM2.36 billion, Malaysia's largest since 2017, priced at RM1.65 per share for 400 million new shares, with listing set for 9 September 2024. - The IPO was oversubscribed by 3.04 times, with an expected post-listing market capitalisation of RM13.9 billion. - In FY2023, 99 Speedmart posted a net profit of RM400.2 million (4.76 sen per share), giving a PER of 34.7 times and a PEG of 2.6 times, with profit growing at a 13.3% CAGR over three years. - Founder Lee Thiam Wah and his wife keep an 83% stake post-IPO, leaving 17% for public trading; 14 cornerstone investors including AHAM Asset Management, AIA, EPF and Perkeso hold 9.35%. - IPO proceeds were earmarked for growth: RM389 million to open 250 new outlets a year toward 3,000 stores, RM100 million for distribution centres, RM47.6 million to upgrade stores and RM45 million to cut debt. - As of March 2024, 99 Speedmart held a net cash position of RM27.8 million (RM78.5 million cash against RM50.7 million borrowings) and commanded a 40.1% mini-mart market share in 2023. On September 9, 2024, 99 Speedmart is set to make a significant move in Malaysia’s retail market [with its Initial Public Offering (IPO)](https://99speedmart.com.my/wp-content/uploads/2024/08/99SMART-Prospectus.pdf). The company plans to raise RM2.36 billion, **making it the largest IPO in Malaysia since 2017**. With over 2,600 outlets serving 1.1 million customers daily, 99 Speedmart is a ***retail powerhouse***. In conjunction with this news, this article shall break down the key details of the 99 Speedmart IPO, including its: 1\. Brief Backstory 2\. Their Business Model 3\. Important IPO Related Numbers 4\. Financial Metrics and Market Valuation 5\. Growth Plans from IPO Proceeds 6\. Benefit for Malaysia’s Economy 7\. Challenges Post-IPO ### Want to Learn More About IPOs? Need a quick overview of IPOs and how they can impact your portfolio?  Check out our article: [What You Need to Know About Investing in IPOs](https://www.mrmoneytv.com/post/what-you-need-to-know-about-investing-in-ipos) or F.A.Q Show's [An IPO Walkthru video](https://www.youtube.com/watch?v=0MTNcg9gpUQ) that can provide deeper insights into the IPO process, potential benefits, and risks, helping you make informed decisions when considering investments like 99 Speedmart. ## The Story Behind 99 Speedmart’s Success ![99 Speedmart Founder Lee Thiam Wah's upper body portrait](../../assets/articles/99-speedmart-s-ipo-what-you-need-to-know-before-buying-their-shares/img-1.webp) Source: The Edge Malaysia How did 99 Speedmart reach this monumental milestone? The journey began with its founder, Lee Thiam Wah. After [contracting polio at 8 months old](https://www.therakyatpost.com/news/2023/02/11/who-is-lee-thiam-wah-the-man-behind-99-speedmart/), Lee was left with a physical disability, facing significant challenges growing up. However, his determination and entrepreneurial spirit led him to create Malaysia’s largest mini-market chain. Driven by his belief in hard work and community service, Lee expanded that small grocery into what is today known as **99 Speedmart**, Malaysia’s largest chain of mini-markets. Over the years, the company has grown to operate more than **2,600 outlets** nationwide, catering to millions of customers. 99 Speedmart’s success is built on three core values: **affordability**, **accessibility**, and **excellent customer service**. These values continue to guide the company’s operations today, making it a trusted name in Malaysia’s retail landscape. ## What’s Their Business Model? 99 Speedmart operates in the retail industry, specifically as **a chain of mini-markets**. They cater to the daily needs of consumers by providing a wide range of grocery and household products, **emphasising convenience and affordability**.  This is where [their business model](https://thestrategystory.com/blog/99-speedmart-swot-analysis/#google_vignette) is centred around high-volume, low-cost retailing. By **offering essential products at competitive prices**, 99 Speedmart can attract a broad customer base, including those who are budget-conscious. The company has strategically leveraged **economies of scale** to maintain its market dominance. Through an extensive network of **distribution centres** and **advanced logistics systems**, 99 Speedmart ensures **affordability** and **efficiency** in its supply chain. ## Important IPO Numbers ![99 Speedmart's Joint Underwriting Signing Ceremony](../../assets/articles/99-speedmart-s-ipo-what-you-need-to-know-before-buying-their-shares/img-2.webp) Source: The Star What makes the [99 Speedmart IPO so significant](https://theedgemalaysia.com/node/704198)? Here are the key numbers: **• RM2.36 Billion:** The amount 99 Speedmart aims to raise, signalling ambitious expansion plans. **• RM1.65 per Share:** The price for each of the 400 million new shares, designed to appeal to a wide range of investors, including retail and institutional investors. **• RM13.9 Billion:** Expected market capitalisation post-IPO, placing 99 Speedmart among Malaysia’s retail leaders. **• 55% Investor Backing:** The IPO has strong support from government-linked companies and major asset managers, a positive signal of confidence from established investors. ## **99 Speedmart’s Market Valuation Aligns with Top Brands -** Nestlé and MR DIY In FY2023, 99 Speedmart reported [a net profit of RM400.2 million (4.76 sen per share)](https://theedgemalaysia.com/node/723471), giving it a [Price-Earnings Ratio (PER) of 34.7 times](https://theedgemalaysia.com/node/723471). The company’s profit has grown at a **Compound Annual Growth Rate (CAGR)** of 13.3% over the past three years, resulting in a **Price-Earnings Growth (PEG)** ratio of 2.6 times. This valuation aligns 99 Speedmart with top Malaysian consumer stocks like Nestlé and MR DIY. Therefore, it doesn't just signals that 99 Speedmart is not just **profitable**, but also **shows strong potential for sustained growth**. This growth trajectory is one of the key reasons why the 99 Speedmart IPO has attracted so much attention. ## Solid Financial Footing Another reason for investor interest is because, as of March 2024, 99 Speedmart had a net cash position of RM27.8 million, with RM78.5 million in cash against RM50.7 million in borrowings. This solid financial footing allows the company to manage debt efficiently and reinvest in growth, making the 99 Speedmart IPO even more attractive. The ability to manage debt and still have capital for growth is a major factor that makes the **99 Speedmart IPO** an attractive proposition. The company’s solid balance sheet reduces risk for investors, making it a safer investment option compared to companies with higher debt loads. ## Big Investors on Board Post-IPO, Lee Thiam Wah and his wife will retain an 83% stake in 99 Speedmart, leaving 17% for public trading. Among this, [14 cornerstone investors](https://theedgemalaysia.com/node/723471), including AHAM Asset Management, AIA, EPF, and Perkeso, will hold 9.35% of the company.  Additionally, [a](https://theedgemalaysia.com/node/723471) [**moratorium**](https://theedgemalaysia.com/node/723471) [will be placed](https://theedgemalaysia.com/node/723471) on the shares held by Lee and his wife, restricting their sale for a specific period. This ensures **ownership stability** and reassures investors about the company’s long-term growth prospects. ## Oversubscribed IPO by 3.04 Times ![Group Photo with 99 Speedmart Founder during IPO Prospectus Launch Ceremony](../../assets/articles/99-speedmart-s-ipo-what-you-need-to-know-before-buying-their-shares/img-3.jpg) Source: Nanyang Siang Pau (NSP) 99 Speedmart isn’t just another retailer—it’s a leader in Malaysia’s mini-mart industry, holding a 40.1% market share as of 2023. The RM2.36 billion raised from this IPO is set to fuel further growth with **expansion** and **infrastructure upgrades**. The strong market interest in 99 Speedmart’s IPO is evident as the [IPO was oversubscribed by an](https://www.thestar.com.my/business/business-news/2024/08/29/99-speed-mart-ipo-oversubscribed-by-304-times) [**impressive 3.04 times**](https://www.thestar.com.my/business/business-news/2024/08/29/99-speed-mart-ipo-oversubscribed-by-304-times), reflecting **high investor confidence in the company’s potential**. However, it also means competition for shares will be fierce, possibly driving up the share price once the stock is listed. ## Growth Plans for 99 Speedmart Source: The Edge Malaysia / 99 Speedmart How will 99 Speedmart use their IPO proceeds to grow the business further? Here are the notable plans: **• Aggressive Store Expansion:** RM389 million to open 250 new outlets annually until 2025, increasing the total to 3,000 stores. This expansion will enhance the company’s accessibility and market presence. **• Strengthening Supply Chain:** RM100 million will be allocated to building new distribution centres to support the expanding network. These facilities will support the expanding store network and help maintain product availability. **• Upgrading Existing Stores:** RM47.6 million to modernise existing outlets and enhance customer experience. This will improve the **customer experience** and help **maintain loyalty** in a competitive retail landscape. **• Debt Reduction:** RM45 million to lower debt and strengthen financial stability as they will allocate approximately 6.8% of the gross proceeds. It helps to repay 14 term loan facilities with Alliance Bank Berhad, while pursuing more aggressive growth plans in the Malaysian retail market scene.  ## How the 99 Speedmart IPO Benefits Malaysia The 99 Speedmart IPO is not just a financial event to raise funds; it holds broader significance for Malaysia’s economy: **• Boosting Investor Confidence:** A successful IPO could [attract further investments in Malaysia’s retail sector](https://theedgemalaysia.com/node/685344). When a major player like 99 Speedmart performs well, it often **attracts more investments**, leading to innovation and competition. **• Creating Jobs:** Expansion will create jobs, particularly in less developed areas, helping **lift more people out of unemployment** and stimulate local economies, further boosting consumer spending. **• Improving Supply Chains:** With new distribution centres on the horizon, 99 Speedmart could set new benchmarks for supply chain efficiency in Malaysia’s retail industry. More efficient supply chains can lead to **better product availability** and **potentially lower prices for consumers**. **• Supporting Local Brands:** With more stores and increased purchasing power, 99 Speedmart can give local products more shelf space, helping smaller Malaysian brands reach a wider audience. This support could lead to **higher sales for local manufacturers and suppliers**, providing them with the stability needed to grow. ## Challenges Post-IPO While the prospects for 99 Speedmart are promising, few challenges could impact the company’s profitability: 1. **Intense Competition:** The retail sector in Malaysia is highly competitive. If 99 Speedmart cannot maintain its pricing or convenience advantage, it risks losing market share to larger players like supermarkets and hypermarkets. 2. **Supply Chain Disruptions:** Like all retailers, 99 Speedmart is vulnerable to supply chain issues. Disruptions, whether due to global events or logistical challenges, could lead to stock shortages and increased costs. 3. **Labour-Intensive Operations:**  99 Speedmart relies heavily on human labour. Delays in automation or rising labour costs could impact the company’s profit margins and growth potential. ## Final Thoughts The **99 Speedmart IPO** represents a significant milestone in Malaysia’s retail sector. With strong financial backing, ambitious growth plans, and a solid market position, the company is well-poised for future success. However, as with any investment, it's essential to consider the risks, including **market competition**, **supply chain disruptions**, and **reliance on labour**. As the IPO date approaches, we encourage you to **do your own research (DYOR)** to assess how the **99 Speedmart IPO** fits into your financial strategy. The decision should align with your **investment goals** and **risk tolerance**. ***Disclaimer:*** *The information provided in this article is for educational and informational purposes only and should not be construed as financial or investment advice. Please consult with a qualified financial advisor or do your own research before making any investment decisions.* *Subscribe to our* [*financial newsletter*](https://www.mrmoneytv.com/) *for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.* ## Reference Links: 1. [Who Is Lee Thiam Wah - The Man Behind 99 Speedmart? | TRP](https://www.therakyatpost.com/news/2023/02/11/who-is-lee-thiam-wah-the-man-behind-99-speedmart/) 2. [The Edge Malaysia - 99 Speedmart’s Financial Metrics](https://theedgemalaysia.com/node/723471) 3. [The Star - 99 Speedmart IPO Oversubscribed](https://www.thestar.com.my/business/business-news/2024/08/29/99-speed-mart-ipo-oversubscribed-by-304-times) 4. [99 Speedmart Prospectus](https://99speedmart.com.my/wp-content/uploads/2024/08/99SMART-Prospectus.pdf) 5. [99 Speed Mart IPO to raise RM2.3b, largest IPO in seven years](https://www.nst.com.my/business/corporate/2024/08/1091907/99-speed-mart-ipo-raise-rm23b-largest-ipo-seven-years#google_vignette) 6. [99 Speedmart IPO likely priced around RM1.20 to RM1.50 per share](https://www.freemalaysiatoday.com/category/business/2024/07/30/99-speed-mart-ipo-likely-priced-around-rm1-20-to-rm1-50-per-share/) 7. [99 Speed Mart files for IPO, seeking minimum public shareholding spread of 15%](https://theedgemalaysia.com/node/704198) 8. [99 Speed Mart mulling IPO at up to RM1.5 bil value, say sources](https://theedgemalaysia.com/node/685344) 9. [99 Speedmart SWOT Analysis - The Strategy Story](https://thestrategystory.com/blog/99-speedmart-swot-analysis/#google_vignette) 10. [99 Speed Mart's IPO, Malaysia's largest in 7 years, oversubscribed 3.04 times | The Star](https://www.thestar.com.my/business/business-news/2024/08/29/99-speed-mart-ipo-oversubscribed-by-304-times) ## Frequently asked questions ### How much did 99 Speedmart's IPO raise? 99 Speedmart's IPO aimed to raise RM2.36 billion, making it Malaysia's largest IPO since 2017. The shares were priced at RM1.65 each for 400 million new shares, with an expected post-listing market capitalisation of RM13.9 billion. Listing was set for 9 September 2024. The offer was oversubscribed by 3.04 times, a sign of strong investor demand ahead of the debut. ### Who owns 99 Speedmart after its IPO? After the IPO, founder Lee Thiam Wah and his wife keep an 83% stake in 99 Speedmart, leaving 17% for public trading. A moratorium restricts the sale of their shares for a set period. Fourteen cornerstone investors, including AHAM Asset Management, AIA, EPF and Perkeso, hold 9.35% of the company, signalling confidence from established institutional backers. ### What will 99 Speedmart do with its IPO money? 99 Speedmart earmarked its proceeds for growth. RM389 million goes to opening 250 new outlets a year toward a total of 3,000 stores. RM100 million funds new distribution centres, and RM47.6 million upgrades existing outlets. RM45 million, about 6.8% of gross proceeds, repays 14 term loan facilities with Alliance Bank Berhad to cut debt and steady its finances.