99 Speed Mart

[weijian]

This is probably the company that has caused the Jardines to sell off their Msian grocery ops Giant. Of course for a start, Msian grocery has never been easy. Over the past 1 decade, consumer behavior has reversed back to smaller formats. 99 Speed Mart is probably also giving Vincent Tan's 711 franchise a lot of discomfort too and the latter is putting in a lot of CAPEX to differentiate and pivot to more ready-to-eat/house brands SKUs.

The headline valuation is the 34.7 P/E ratio. With clear retail visibility since this is a B2C business, coupled with negative working capital and a hot Bursa Market, the bankers are getting paid well to deliver. We can easily benchmark 99 Speed Mart's IPO valuation to what SGX's ShengSiong Group is currently trading it and we should be able to see that it is priced at around double of SSG's P/E!

99 Speed Mart IPO: Should you subscribe?

Founded in 1987 as a small single sundry shop in Selangor, 99 Speed Mart Holdings Berhad (KLSE: 99SMART) has expanded over the years to 2,651 outlets across Malaysia.

These outlets are mainly concentrated in the Klang Valley area, which covers most of the Selangor state.

The moat value proposition of the company’s business lies in its sheer size and ubiquity – it is strategically situated near housing areas, making it convenient for customer to pick up their essential sundry goods. It offers goods at cheaper prices, and patrons usually need not subject themselves to jams and car park surcharges to grab what they need.

For Singaporeans, think of it like having a Sheng Siong just downstairs of your HDB or just a mere 5-minute walk away.

https://drwealth.com/99-speed-mart-ipo-s...subscribe/

[Big Toe]

99 speed mart. If my sources are correct, 99 speed mart already have presence in SG as they took over a relatively new supermarket chain here. It was a private deal and I do not have exact details but I do know they were quite generous in their aquisition offer.

The supermarket/minimart/convenience store scene here is more than saturated. there are only smaller sub-segments uptapped/worth vying for. That is to say one cant grow very big here starting from scatch, even if one have ample resources. Unless one offers differentiated products like donki. But one has to bear in mind the size of Don Quijote to have that range of products.

This is an area where I have in depth knowledge, but it still doesnt give me much of an edge over investing in DFi or Sheng Shiong.