Topvision Eye Specialist Berhad Launches IPO, Subscription Opens on 25th November 2024

On 25th November 2024, TOPVISION Eye Specialist Berhad is scheduled to transition its listing from the LEAP Market to the ACE Market of Bursa Malaysia Securities Berhad ('Bursa Securities'). Concurrently, the company will conduct an Initial Public Offering (IPO), with the subscription period running from 25th November to 3rd December. According to the official prospectus, the IPO is priced at RM0.33 per share, and the listing is scheduled for 16th December.

TOPVISION Eye Specialist Berhad is primarily engaged in offering a comprehensive range of medical eye care services, which include general eye examinations and the treatment of various eye diseases, such as performing vitreoretinal surgeries. These services are provided across our network of 11 Ambulatory Care Centers (ACCs) situated throughout Peninsular Malaysia. They specialize in outpatient care, meaning that all our procedures are conducted on a day-care basis, allowing patients to return home on the same day as their treatment.

TOPVISION's primary market is in Malaysia, where it mainly serves local patients. For the fiscal year ending 2023, local patients contributed RM42.05 million or 97.88% of the company's total revenue. In comparison, foreign patients contributed RM0.91 million or 2.12% of the company's revenue during the same period. This demonstrates the company's significant dependence on the domestic market for its operational and financial performance.

Based on the IPO Price of RM0.33, the total gross proceeds of RM17.89 million from the public issue will be used by the company in the following manner:

1. Establishment of TOPVISION International: RM7,900,000 (44.15% of the total funds), to be utilized within 18 months from the date of the Transfer of Listing.

2. Establishment of TOPVISION Kuala Terengganu and TOPVISION Tawau: RM5,000,000 (27.94% of the total funds), with an estimated timeframe for use of proceeds within 24 months from the date of the Transfer of Listing.

3. Purchase of machines: RM498,000 (2.79% of the total funds), planned to be used within 12 months from the date of the Transfer of Listing.

4. Estimated expenses for the Transfer of Listing: RM4,495,000 (25.12% of the total funds), to be expended within 1 month from the date of the Transfer of Listing.

From fiscal year 2021 to 2023, the company's revenue has shown a steady upward trend, increasing from RM31,530,000 to RM42,958,000. This indicates the company's competitive strength and business development capabilities in the market.

In terms of gross profit, the company has grown from RM15,870,000 in fiscal year 2021 to RM21,201,000 in fiscal year 2023, with the gross margin slightly decreasing from 50.33% to 49.35%. This suggests that while the company is increasing its revenue, it is also striving to maintain cost efficiency.

Regarding net profit, the company achieved RM5,110,000 in fiscal year 2021, but experienced a decline in fiscal years 2022 and 2023, with RM4,855,000 and RM4,824,000 respectively, indicating a downward trend in net profit. The net profit margin also decreased from 16.21% in fiscal year 2021 to 11.23% in fiscal year 2023.

In summary, the company has performed well in terms of revenue and gross profit, but the decline in net profit and net profit margin is a concern that warrants attention.

Malaysia's ophthalmic medical industry is showing a robust development trend, which is composed of public and private sectors that jointly provide services to patients. In recent years, with the increasing demand for treatments such as cataract surgery, it has shown the public's strong demand for high-quality ophthalmic medical services. In 2022, the industry's revenue increased by 29.4%, reaching RM702.4 million, indicating the strong market momentum. Over the next few years, the industry is expected to continue to grow at a compound annual growth rate of 10.1%, with revenue expected to reach RM1.233 billion by 2028.

In terms of competitive landscape, Malaysia's ophthalmic medical market includes both government agencies and private enterprises, such as TOPVISION Group, a private ophthalmic medical service provider that serves a broad patient base through its 10 outpatient care centers. The driving forces for industry development come not only from stable population growth, aging trends, and the rise of medical tourism but also from the increase in consumer purchasing power and the rise in lifestyle-related diseases. In addition, government support policies and technological advancements provide a solid backing for the industry.

Looking ahead, Malaysia's ophthalmic medical industry will continue to maintain a good growth trend, increasing from RM838.4 million in 2024 to RM1.233 billion in 2028, showing a broad development space and potential.

The public issue comprises a total of 54,220,000 new shares, distributed as follows:

– 33,928,000 issue shares will be made available to institutional and selected investors through a bookbuilding process.

– 20,292,000 issue shares will be offered to the Malaysian public, eligible directors, employees, and individuals who have contributed to the success of TopVision and its subsidiaries.

The Group boasts an experienced management team, led by its founder and Executive Vice Chairman, Datuk Kenny, and Dr. Peter, who serves as the Chief Executive Officer and Executive Director. Under Datuk Kenny's leadership, the Group has significantly expanded, growing from a single Ambulatory Care Center (ACC) to eleven as of the latest public disclosure. Dr. Peter contributes over 15 years of expertise as an ophthalmologist, actively engaging in both clinical and operational management. The management team is further bolstered by the Chief Operating Officer, Soong Yoke Voon, and the Chief Financial Officer, Tan Mei Hui, both of whom bring more than 15 years of relevant industry experience to their roles.

The group is proud to have an experienced team of ophthalmologists, each bringing 6 to 15 years of dedicated and qualified service in medical eye care. Committed to professional development, our ophthalmologists are active members of various medical associations and frequently participate in conferences and scientific meetings. This ensures they remain at the forefront of the latest advancements in medical technology, thereby providing the best possible care to our patients.

The Group has successfully expanded to 11 Ambulatory Care Centers (ACCs) across various states in Peninsular Malaysia, significantly enhancing accessibility for patients and broadening the patient base. This widespread presence not only facilitates better healthcare reach but also contributes to the Group’s reputation as a leading provider of medical eye care services in the country.

The Group has established a robust network of collaborations with various insurance companies and Third-Party Administrators (TPAs) in Malaysia, providing insured patients with the convenience of cashless medical facilities. In addition to its local partnerships, the Group has extended its reach internationally by forming alliances with globally-oriented TPAs, particularly focusing on facilitating access to medical care for Indonesian patients seeking treatment in Malaysia. Through these strategic partnerships, the Group aims to enhance the accessibility and quality of healthcare services for a broader international patient base.

The Group offers a comprehensive array of medical eye care services, encompassing general eye care, cataract and retina surgery, as well as the management of conditions such as Age-related Macular Degeneration (AMD) and glaucoma. Looking ahead, the organization has outlined plans for future expansion, aiming to introduce advanced procedures like LASIK and implantable collamer lens (ICL) surgeries upon the commencement of operations at TOPVISION International.

TOPVISION Eye Specialist Berhad's business operations are heavily reliant on obtaining and maintaining various approvals, licenses, permits, and certificates from Malaysian authorities, including the Ministry of Health (MOH). It is crucial for the company to ensure continuous compliance with all regulatory requirements to operate effectively within the healthcare sector.

The success of TOPVISION Eye Specialist Berhad is highly dependent on the expertise and reputation of its directors, key management team, and ophthalmologists. Maintaining a high standard of professional competence and ethical conduct among these individuals is vital for the company's reputation and patient trust.

TOPVISION Eye Specialist Berhad faces risks related to real estate, such as the expiry or termination of rental agreements, or increases in rental costs. These factors could force the company to relocate, incurring additional costs and potential operational disruptions, which may impact patient services and business continuity.

TOPVISION Eye Specialist Berhad is exposed to the risk of malpractice, medical negligence, or misconduct claims. Such incidents can damage TOPVISION Eye Specialist Berhad's reputation and result in financial losses. It is imperative for the company to have robust risk management and insurance policies in place to mitigate these risks.

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