Malaysian Mini-Market Chain 99 Speed Mart Jumps 14% on Debut

(Bloomberg) — Shares of convenience-store chain 99 Speed Mart Retail Holdings Bhd rallied more than 14% on their first day of trading after what was Malaysia’s biggest initial public offering in seven years. 
The stock rose to as high as 1.89 ringgit on Monday. The $531 million IPO was priced at 1.65 ringgit per share, valuing the company at about $3.2 billion. 
The debut cements Kuala Lumpur’s position as the busiest location for listings in Southeast Asia this year as Malaysia’s market regained favor among global investors. The company’s shares also offer traders exposure to the nation’s consumer sector, given expectations that the economy will expand about 5% in 2024.
“This stock should do well because they are representing the domestic consumption trend,” said Nixon Wong, chief investment officer of Tradeview Capital Sdn, a Kuala Lumpur-based boutique fund manager.
At current valuation of 24.9 times its 2024 estimated earnings, 99 Speed Mart is priced cheaper than peers including 7-Eleven Malaysia Holdings Bhd and MR DIY Group M Bhd, according to an analysis by Aequitas Research.
The chain’s IPO helped mint its founder, Lee Thiam Wah, as a billionaire. Lee started the company in 1987 as a single sundry store in the state of Selangor and grew it into a retail empire with more than 2,600 outlets. It reported an 8.6% increase in revenue for the first half of the year to 4.8 billion ringgit ($1.1 billion), helped by sales at its new outlets and bulk-sales e-commerce platform.
IPOs in Malaysia have raised $1.29 billion so far this year, almost double the amount for all of 2023, according to data compiled by Bloomberg. The first-day performance of listings in the country have been decent with an average gain of 7% in the past year through Friday, data show. 
Companies that have gone public in Malaysia this year include palm-oil producer Johor Plantations Group Bhd in a $156 million deal, and Alpha IVF Group Bhd, whose listing raised $98 million.
The convenience-store chain will use most of the proceeds raised to expand its network of stores, set up new distribution centers and upgrade existing outlets, among other things. 
CIMB Investment Bank Bhd, Affin Hwang Investment Bank Bhd and RHB Investment Bank Bhd are underwriters in the offering.
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