Laser vision on Optimax as it looks appealing

Optimax Holdings Bhd has recovered from a low of 58 sen on Mar 6 to touch a year high of 74 sen in June. In the past 6 months, the counter has gained 15.83% to close at 70 sen on July 19.

Interest in Optimax continued despite it posting poorer net profit of RM12.9 million in the financial year ended Dec 31, 2023 from RM14.7 million in the previous year. This is despite higher revenue of RM113.9 million compared with RM108 million. The increase in revenue is mainly due to the effective marketing effort from ongoing promotions through online platforms and contribution from newly set up satellite clinics/centre.

Meanwhile, the decrease in profit was mainly due to increase in operating cost where additional staffs (ie doctors, nurse, optometrist and supporting staff) were hired. These staffs were hired in advance for the upcoming expansion of new ambulatory care centres and satellite clinics/centres at the new location. Hence, staffs will be well trained in our existing centres before transferring them to the upcoming new ambulatory care centres and satellite clinics/centres. In addition, Optimax has incurred pre-operation costs (i.e., consultancy and professional costs) for the Cambodia ambulatory care centre.

Optimax’s poor run continued into the first quarter of FY24 as it postd a marginally lower net profit of RM3 million while revenue was slightly higher at RM28.2 million. Investors are perhaps bullish on the counter as market consensus is projecting the group to log rising net earnings of RM15.3 million in FY2024 and RM18 million in FY2025. Based on the projected earnings, the company’s prospective price earnings ratios would be 24.9x this year and 21.1x next year.

There are also good news from its overseas venture. In May 2024, the group has commenced operations for the Cambodia branch and its first aesthetic clinic in Malaysia. Contributions from Cambodia outlet and aesthetic clinic started in June.

On another positive note, PublicInvest Research has initiated coverage on Optimax with an “outperform” rating at 68 sen and a target price of 83 sen. This was based on a 27x price earnings ratio pegged to FY2025 earnings per share of 3.1 sen. The research house said it believes Optimax’s growth prospect hinges on growing demand for cataract surgeries, fuelled by an increasing ageing population in Malaysia. Furthermore, PublicInvest said a surge in diagnosed diabetes cases and the increased usage of electronic gadgets may lead to higher occurrence of eye-related diseases.

These factors are more than sufficient for it to surge higher soon.