Really love the management team of Optimax. This company gives me the vibes like Harnlen. The growth potential of Optimax is endless. A lot of investors are putting money in healthcare; Eye-specialist services will keep expanding at an estimated CAGR of 6% as Malaysia aging population grows and increased demand for cataract treatments.
198. Regarding the issue of overcrowding in public health facilities, several measures will be undertaken.
The nation’s health capacity will be optimised by outsourcing patients from overcrowded hospitals to other hospitals, including university hospitals, military hospitals and private hospitals.
Young ppl go for Lasik, seniors go for cataract--replacement of lens by artificial lens. Johor clinic will attract Singaporeans, when they come over for happy weekends! So, why down so much? I top up some already.
Optimax Holdings - FY22: Earnings and DPS In-line Date: 2023-03-01 Firm: MAYBANK Stock: OPTIMAX Price Target: 0.86 Price Call: BUY Last Price: 0.745 Upside/Downside: +0.115 (15.44%) Maintain BUY With Higher TP of MYR0.86 Optimax’s FY22 core net profit was within our expectations, coming in at MYR14.7m, making up 100%/97% of our/consensus FY22E earnings forecast. We adjust FY23E/FY24E by +2%/-11%, factoring for minor housekeeping and leaving room for potential delays in the construction of the Kempas hospital, which we now assume to commence operations by FY25 (prev. 2HFY24). We also introduce FY25E forecasts. Maintain BUY with a higher, DCF-based TP of MYR0.86 (prev. MYR0.84).
4Q22: Slight Margin Contraction as New Centres Open 4Q22 core net profit increased to MYR3.8m (+7% YoY, 4% QoQ) aided by maiden revenue contribution from newly opened eye specialist centres, bringing 4Q22 revenue to MYR28.4m (+6.8% YoY, -1.1% QoQ). We believe the new loss-making centres which opened in 2H22 were the cause of the EBITDA and PBT margin contractions, both YoY and QoQ. However, net profit margins remained level (+0.1 ppt YoY) or increased (+0.7ppts QoQ) as minority shareholder resident doctors shared in the losses of the new centres.
Steady FY22 Core Operations; DPS Expectations Met We remain upbeat on Optimax’s core operations, with FY22 core net profit growing by 20% YoY to MYR14.7m, contributed by higher revenue of MYR108m (+22% YoY) which was driven by the re-opening of the economy, resilient demand for eye surgeries, and maiden revenue contribution from new centres. As expected, Optimax announced a second interim DPS of 1.2 sen, which will be paid out on 30 Mar 2023. This brings total DPS announced for FY22 to 2.4 sen (1.2 sen announced in 3Q22), which translates to total dividends of MYR13.0m and a dividend payout ratio of 88% of core net profit. We maintain our DPR assumptions of 80% for FY23E/FY24E/FY25E.
Expansion Plans Continue In the 3Q22 results briefing, management shared that the Bahau ACC and Cheras satellite clinic were fully operational by end-3Q22, with 2 new satellite clinics slated to open in 4Q22. Management also shared intentions to open 7 new satellite clinics in FY23. Moving forward, we expect higher revenue contribution from consultations and treatment of other eye diseases, but minor margin contractions as new centres steadily mature.
Summary Optimax Holdings Bhd’s (OPTIMAX) 4Q22 core net profit improved 7.5% YoY to RM3.8m, bringing a 20.0% YoY increase on its FY22 core net profit to RM14.7m. The results came in within expectation, amounting to 102.1% of our full year forecast of RM14.4m. Meanwhile, an interim dividend of 1.2 sen per share, payable on 30th March 2023 was declared. QoQ, core net profit showed an improvement of 4.1% to RM3.8m, despite a drop of 1.1% QoQ decline in its revenue to RM28.4m and this was mainly due to the lower minority interest of –RM0.2m registered for 4Q22 vs RM1.1m in 3Q22. FY22 core net profit climbed 20.0% YoY, mainly attributed from (i) the increase in revenue arising from higher number of surgeries conducted amid economy reopening, (ii) effective marketing effort from ongoing promotions via online platforms, and (iii) better control over operating costs by leveraging on the experience gained from multiple lockdowns since March 2020. Moving forward, OPTIMAX will continue to boost the capacity of its Ambulatory Care Centre (ACC) in regions other than central Malaysia by hiring more surgeons. Meanwhile, the group continued to seek strategic locations to set up more satellite clinics to support its growth, targeting 5 satellite clinics in FY23. We expect its new ACC in Bahau, Negeri Sembilan and satellite clinic in Taman Sutera, Johor which were both established in FY22, would secure more patients and operate above break-even in the following 6-12 months, resulting in a higher margin for the group. There is no material development pertaining to both MoU entered into with Selgate Healthcare Sdn. Bhd., as well as with Sena Resources Sdn. Bhd. and Kempas Eye Specialist Hospital Sdn. Bhd. Valuation & Recommendation Although the reported earnings came in within our expectations, we upgrade our FY23f earnings forecast by 6.9% to RM15.5m, taking into account the higher expectation on number of surgeries to be conducted amid economic reopening. Meanwhile, the core net profit forecast for FY24f is introduced at RM17.6m. We maintained our BUY recommendation on OPTIMAX with a revised target price of RM1.15 (from RM1.07). The target price is based on the assigned target PER of 40.0x to our revised FY23f EPS of 2.9 sen. Risks to our recommendation include the possible resurgence of Covid-19 infections which may result in postponement of surgeries. Besides, the inflationary pressure amid rising food and energy prices remains as threat to local economy. Source: Mplus Research - 1 Mar 2023
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