99 Speed Mart Enters China With First Outlet In Fuzhou Fujian

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KENANGA is positive on 99 Speed Mart Retail’s foray into China, considering the matured stage of its domestic market in Malaysia. That said, we are cognisant of the execution risks in China. 

The earnings impact is expected to be muted in the near term, but could turn out to be the next big leg of growth if its success is replicated there. We continue to like 99SMART as the major proxy to capture the resilient consumer spending in Malaysia.
99SMART has extended its footprint into China by opening its first outlet in Fuzhou, Fujian, on 31 Aug (Figures 1-6). “We are not entirely surprised by the move, as the group – during its 2Q25 results announcement – outlined its vision to expand the business beyond domestic borders, and has been exploring various opportunities,” said kenanga.
Whilst we are positive on the venture as a step forward to foster and sustain its longer-term earnings growth, we remain well cognisant of the execution risks and challenges in the competitive China market. 
We understand the China operation will be wholly owned by 99SMART. It has not set a specific store opening target, and the pace of expansion there will depend on the performance of the first few outlets.
Hence, the initial capex and earnings impact should be minimal until the expansion pace is accelerated. Its balance sheet (net cash of MYR836m as of 2Q25) is sturdy enough to support the expansion. 

Based on our quick checks, we are not able to identify any prominent or major mini-market chain players in Fujian. This could indicate that the industry is currently dominated by independent (mom-and-pop) players and/or the consumer preference for grocery shopping is with the larger-scale supermarkets.
Hence, the opportunities could be huge (>40m population in Fujian) if 99SMART’s success at home is replicated in China, by consolidating the industry or driving a favourable switch in consumer preference there.
That said, it remains to be seen how the group can commit to its ethos of “near and save”, as it may not be able to leverage much on its existing scale of operations to secure competitive unit costs with grocery products typically sourced locally. — Focus Malaysia

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