Wheelchair-bound Lee Thiam Wah, the founder of the ubiquitous 99 Speedmart convenience stores, is set to take his place among Malaysia’s richest tycoons when 99 Speed Mart Retail Holdings Bhd is listed on Monday.
Even before his company debuts on Bursa Malaysia’s Main Market on Sept 9, Forbes has already listed Lee, 60, as having a net worth of US$2.8 billion (RM12.1 billion).
This would put him ahead of Genting Group chairman Lim Kok Thay (net worth US$2.1 billion/RM9.9 billion), who is in ninth position in Forbes’ Malaysia’s 50 Richest list, and just behind Sunway Group founder Jeffrey Cheah (US$3 billion/RM12.9 billion) at the No 8 spot.
At the initial public offering (IPO) price of RM1.65 per share and based on its enlarged issued share capital of 8.4 billion shares, the company would have a market capitalisation of RM13.86 billion.
Its valuation will undoubtedly be much higher if the shares rise above the IPO price post-listing as it is widely expected.
Rags-to-riches
If there is a perfect rags-to-riches story, Lee’s journey must surely be it. His story of overcoming physical disability and adversity to claim a spot among the Top 10 of Malaysia’s richest individuals is certainly inspiring.
Life dealt him what seemed to be a crippling blow when he contracted polio as an infant, taking away the use of his legs. Unlike many tycoons born with a silver spoon in their mouths, Lee, who has 10 siblings, came from humble roots.
His father was a construction worker while his mother was a hawker. They were only able to support his education up until primary school.
As a teenager, instead of going to secondary school, Lee decided to start his entrepreneurial journey by selling snacks by the roadside.
Eventually, he saved enough money to start a sundry shop in 1987 at the age of 23. Pasar Raya Hiap Hoe, a typical Malaysian mom and pop sundry shop, was located in the neighbourhood of Tepi Sungai, Klang.
Some years later, he sold the shop and the funds were used to open his first mini-mart – Pasar Mini 99 – in Klang Utama in 1992. By the late 1990s, the business had grown to eight outlets in Klang.
This foray into the mini-mart business provided Lee with valuable insight into the grocery store landscape, building the foundation for his future convenience store empire.
Between 2000 and 2003, the stores underwent another rebranding to 99 Speedmart as Lee adopted an intensive expansion strategy.
The rest is history as 99 Speedmart grew to become a fixture in most Malaysian neighbourhoods. Its stores fill a niche in the grocery retail chain between higher value grocery chains, such as Jaya Grocer and Village Grocer, and the purchase of groceries online.
The company, 99 Speed Mart, now has over 2,650 outlets nationwide, targeting 250 new outlets annually. The management has indicated the potential to expand to up to 5,000 outlets nationwide before market saturation sets in.
In an interview, Lee revealed he picked the number 99 as it signifies the nature of imperfection in this world.
We chose the number 99 because it implies that even though we are not perfect, we still aim to offer our customers the best services and products we have at a competitive price,
Biggest IPO in seven years
99 Speed Mart’s listing will be Malaysia’s biggest initial IPO in seven years, raising up to RM2.36 billion, the most since Lotte Chemical Titan Holding Bhd’s listing in 2017 when it grossed RM3.77 billion.
99 Speed Mart’s IPO involves an offer for sale of 1.028 billion existing shares and a public issue of 400 million new shares.
Lee, the group’s CEO, and his wife Ng Lee Tieng will net a whopping RM1.7 billion from the sale of 1.028 billion of their shares.
His net worth is anticipated to increase over time if 99 Speed Mart follows a similar trajectory to Mr DIY Group (M) Bhd, the last major retail chain operator to be listed.
Listed in 2020, Mr DIY raised RM1.5 billion from its listing. At the IPO price of RM1.60, the company was valued at about RM10 billion. Its shares closed at RM2.05 on Friday, up 75% from its IPO price, valuing the group at RM19.38 billion.
Meanwhile, Mercury Securities has assigned a fair value of RM1.99 to 99 Speed Mart, a 21% premium to its IPO price of RM1.65.
99 Speed Mart dominates the mini-market industry with a 40.1% market share and holds an 11.6% market share in the overall grocery retail sector based on 2023 revenue
For the first half ended June 30 (FY2024), the group’s net profit grew by 41.7% to RM258.87 million, with revenue rising by 8.6% to RM4.84 billion.
Source : FMT
Lee Thiam Wah’s first retail venture was selling snacks from a roadside stall in Malaysia. Several decades later, the entrepreneur has transformed that humble beginning into a sprawling retail empire of more than 2,600 convenience stores across the nation.
On Monday, the 60-year-old will be newly minted as a billionaire after his company 99 Speed Mart Retail Holdings Bhd goes public in Kuala Lumpur.
The US$531 million initial public offering is Malaysia’s largest in seven years. At the IPO price of 1.65 ringgit (US$0.38) per share, Lee’s fortune is about US$3.3 billion, according to the Bloomberg Billionaires Index.
The listing cements Kuala Lumpur as the busiest location for market debuts in Southeast Asia this year and shows investor optimism in the nation’s growth potential. The firm’s shares are seen as a way to build exposure to the consumer sector in an economy that’s projected to expand as much as 5 per cent this year.
“It comes at a crucial moment for both Malaysia’s IPO landscape and Southeast Asia’s capital markets,” said Mohit Mirpuri, a senior partner and fund manager at Singapore-based SGMC Capital Pte Ltd. “This could boost market sentiment and position Malaysia as a key player,” in regional listings, he said.
Lee was born in 1964 in Klang, one of several cities littering the stretch between Kuala Lumpur and the shores of the Malacca Strait. His father, a construction worker, and his mother, a hawker, had 11 children and could only afford to send Lee to school for six years.
His first retail venture – that roadside stall – was born of necessity. As a child he contracted polio and permanently lost the use of his legs.
“Nobody would hire me due to my physical limitation,” he told Forbes in 2012. “I have to help myself.”
Lee opened a grocery shop in 1987 and a decade later he was running eight stores under the name Pasar Mini 99, where his wife, Ng Lee Tieng, 44, started her career as a purchasing executive in 1997. Until the IPO, the couple were the company’s sole owners.
Today, the chain is the largest of its kind in Malaysia, holding a 40 per cent share in the mini-market segment and nearly 12 per cent among all grocery retailers, according to the IPO prospectus.
Lee’s “journey is an inspiring example for small business owners, showing that with determination, perseverance and a customer-focused approach, it’s possible to scale a business, even from humble beginnings,” said SGMC’s Mirpuri.
Lee will remain as the company’s chief executive officer. The 99 Speed Mart chain forms the bulk of his net worth, along with cash collected from dividends and the share sale.
He also holds stakes in multiple closely held businesses, including the sole Malaysian franchiser of Burger King restaurants. Last year he also briefly emerged as one of the biggest individual shareholders in Alliance Bank Malaysia Bhd. with a roughly 5 per cent stake, regulatory filings show.
As the FTSE Bursa Malaysia KLCI Index equities benchmark heads to its best year since 2010, listings are back after years of lacklustre growth.
99 Speed Mart’s listing attracted 14 cornerstone investors that included abrdn Asia Ltd. and UOB Asset Management (Malaysia).
About 28 per cent of the proceeds from the IPO will go to the company, which plans to set-up new outlets and distribution centres, purchase delivery trucks and repay loans, according to the prospectus. The company posted a profit after tax of 133.2 million ringgit on revenue of 2.4 billion ringgit for the first three months of 2024.
The mini-mart operator’s tagline ‘Near n’ Save’ is part of a business model that emphasises convenience and easy access for consumers, said Arun George, an analyst at Global Equity Research who publishes on the platform Smartkarma.
The scale of the firm’s operations create a barrier to entry and expansion for other mini-market players in Malaysia, “hindering their ability to compete effectively” he said.
Source : SCMP
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