The company, listed just two weeks ago, hit a new high of RM2.30 in early morning trade before paring its gains to settle at RM2.26, up 10 sen or 4.6%, at the midday break with 32.9 million shares changing hands.
This is a 37% jump from its IPO price of RM1.65, giving 99 Speed Mart a market capitalisation of almost RM19 billion.
This valuation puts it ahead of several component stocks in the FBM KLCI, which comprises the country’s 30 most valuable companies.
The list includes Sime Darby Bhd with a market cap of RM16.4 billion, QL Resources Bhd (RM16.8 billion), Genting Bhd (RM 15.8 billion), and Genting Malaysia Bhd (RM13.3 billion).
99 Speed Mart’s valuation is just behind that of FBM KLCI constituent Mr DIY Group (M) Bhd, the last major retail chain operator to be listed, which has a market cap of RM19.9 billion.
At its current price, 99 Speed Mart can make a case to be included in the FBM KLCI reserve list comprising the five largest non-constituents of the index.
A research house analyst reckons foreign investors are driving up the price of 99 Speed Mart shares.
According to Bloomberg, the consensus 12-month target price for the stock is RM2.12 based on the average of four research houses, with all four having “buy” calls.
Macquarie has an “outperform” call with a target price (TP) of RM2.50 followed by UOB Kay Hian (RM2), Nomura (RM1.99) and Hong Leong Investment Bank (RM1.98).
Founder’s net worth soars
99 Speed Mart’s IPO was Malaysia’s largest in seven years. It raised a total of RM2.36 billion including RM1.7 billion from an offer for sale of 1.028 billion shares by its founder and CEO Lee Thiam Wah and his wife Ng Lee Tieng.
The run up in the company’s share price has seen Lee’s net worth soar to US$4 billion (RM16.5 billion) as of today, according to US business media giant Forbes.
Just prior to the company’s listing on Sept 9, Forbes had listed the wheelchair-bound Lee, 60, as having a net worth of US$2.8 billion (RM12.1 billion).
Lee, who contracted polio as an infant, started his entrepreneurial journey by selling snacks by the roadside as a teenager. He saved enough money to start a sundry shop in Klang in 1987 at the age of 23.
As the business prospered and expanded, he eventually established the 99 Speedmart grocery store chain which transformed him into a billionaire and one of the richest individuals in Malaysia.
An eventual entry into the FBM KLCI will be the icing on the cake for Lee.