Financial Highlights

The following table sets out the financial highlights of the company historical financial information for the Financial Years Under Review and Financial Periods Under Review:

• The revenue declined from RM 42 million in FYE 2021 to RM 40 million in FYE 2022, primarily due to the decrease in fertility services revenue. However, it rose to RM 44 million in FYE 2023.

• The gross profit margin fell from 47.55% in FYE 2021 to 39.74% in FYE 2022, due to a decrease in the number of patient visits and higher average costs per visit for fertility TCM services, and it then increased to 40.46% in FYE 2023.

• The PAT margin decreased from 22.33% in FYE 2021 to 12.45% in FYE 2024, and rose to 13.98% in FYE 2023.

• The gearing ratio has decreased to less then 0.01 in FYE 2022, placing the company in a net cash position after loan repayment This indicates that the company still has room to increase its debt to maximize its leverage for business expansion. (A good gearing ratio should be between 0.25 – 0.5). 

Major customers and suppliers

Major Customers

Due to the nature of the company's business, its patients comprise mainly couples and individual women and each patient does not individually account for more than 10% of the company Group’s total revenue. As such, the company is not dependent on any of their customers.

Major Suppliers

The company top 5 major suppliers by total purchases of materials and services for FPE 2024 are as follows: 

The company is not dependent on the major suppliers as they are able to seek alternative sources of supply for laboratory services from other suppliers in Malaysia. 

Industry Overview

O&G healthcare services is a branch of medicine that specialises in the medical and surgical care of women. It comprises fertility as well as obstetrics and gynaecology (herein referred to as “other O&G”) services, as illustrated below: 

Fertility services refer to treatments provided to individuals to increase their chances of conceiving a child. Fertility treatments are available for both men and women. As each individual or couple is different, fertility treatments are typically tailored to an individual’s needs (such as medical history and cause of infertility) and social requirements (such as age and household income). Obstetric services are focused on the provision of care to pregnant women, and span throughout and beyond the maternity period, including pre-pregnancy screening and counselling, family planning counselling, antenatal care, delivery and postnatal care. On the other hand, gynaecology services focus on the care of women’s reproductive systems (including the uterus, fallopian tubes, cervix, ovaries and vagina), including the treatment of medical problems which are closely related to women’s reproductive systems.

According to the research from  PROVIDENCE, the industry size for the fertility, obstetrics and gynaecology services industry can be depicted by revenues of specialised O&G healthcare service providers offering fertility and/or other O&G services. Between 2018 and 2023, the fertility, obstetrics and gynaecology services industry size in Malaysia illustrated growth at a compound annual growth rate (“CAGR”) of 14.2%, growing from RM176.7 million in 2018 to RM343.5 million in 2023. Moving forward, the fertility, obstetrics and gynaecology services industry size in Malaysia is expected to grow at a CAGR of 11.0% between 2024 and 2026 to reach RM469.6 million in 2026.

The key drivers in this industry:

• Decrease in total fertility rate in the country will increase the demand for fertility services

• Increase in disposable income and growth in population are expected to contribute to growth in demand for fertility and other O&G services

• Advanced maternal age and increased incidences of complications will create increased demand for other O&G services

The key risk and challenges in this industry:

• The industry players are dependent on the availability of suitable professionals to provide fertility and other O&G services

• The industry players may be affected by political, economic and regulatory risks that are beyond their control

• The industry players are subject to laws and regulations relating to the personal information of their patients

Future plans and strategies for METRO HEALTHCARE BERHAD

A summary of the company's business strategies is set out below:  

1. The company plans to expand its Group’s network

2. The company plans to expand its existing O&G business

3. The company plans to enhance its Group’s services

MQ Trader View

Opportunities

1. The company has a wide network of facilities on the west coast of Peninsular Malaysia that are well-equipped to provide O&G healthcare services

2. The company has a centralized management which enables them to conform to local and international standards to ensure that they provide the same standard of care to patients for all of their facilities. 

Risk 

1. The company may face disruptions in its facilities and business operations

2. The company is exposed to liability for potential malpractice, medical or negligence claims

3. The company incurs high drug inventory holding costs due to the nature of the business

Click here to continue the IPO - Metro Healthcare Berhad (Part 1)

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