Optimax Holdings is poised for significant growth with the introduction of Malaysia's first presbyopia refractive surgery machine and the opening of new ambulatory care centres (ACCs) in Selangor, Cambodia, and Kota Kinabalu, according to CGS International Stock Broking House (CGS). The company's revenue was expected to achieve a three-year compound annual growth rate (CAGR) of 14.5% for Fiscal Year 2023 to Forecast 2026 (FY23-FY26F), driven by the higher number of surgeries and strategic expansion plans.
CGS maintained an Add rating on Optimax Holdings, reiterating a target price (TP) of RM0.87. The valuation remained undemanding at -1.0 standard deviation (s.d.) from its mean Price per Earnings (P/E) of 25.4x, reflecting the company's robust healthcare exposure and promising growth prospects. CGS projected a strong rebound in earnings, expecting a 24.2% increase in FY24F and a 22.0% rise in FY25F.
Following a visit to Optimax's new eye specialist ambulatory care centre (ACC) and Neumax clinic in Atria Mall, Selangor, CGS reported updates from Group CEO Sandy Tan and Group CFO Pang Woei Yaw. The new ACCs in Selangor, Cambodia, and Kota Kinabalu were anticipated to drive revenue and core net profit growth, with expectations of achieving a new high of RM16 million in FY24F. The company's expansion plans included further ACCs in Selgate Setia Alam and Kempas in FY25-FY26F, contributing to a forecasted three-year CAGR of 20.0% in core net profit for FY23-FY26F.
The introduction of the PRESBYOND machine was a significant development for Optimax, capturing a new patient demographic aged 40 and above. The machine offered laser refractive treatment for presbyopia, or long-sightedness, and was the first of its kind in Malaysia. Management highlighted the growing traction of this treatment, which complemented existing Lasik procedures targeting those below 40. With 11.35 million people, or 34.0% of Malaysia's population, aged 40 and above in 2023, CGS viewed this innovation as a key growth driver for Optimax.
CGS projected a robust earnings rebound in FY24F and FY25F, driven by revenue growth from the opening of new ACCs and margin recovery as these investments matured. Despite a 11% year-to-date (YTD) rebound, Optimax's stock traded at 1.0 s.d. below its three-year mean P/E since its listing in FY20. CGS highlighted stronger-than-expected earnings delivery in FY24-FY25F as a potential re-rating catalyst.