Optimax Holdings Berhad - Within expectations
Thu, 29-May-2025 06:41 am
by Chelsea Chew • Apex Research

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OPTIMAX (0222)

Target Price (RM)

0.690

Recommendation

Buy

  • Optimax reported a 1QFY25 CNP of RM3.4m (14.5% yoy, 12.0% qoq) came within both our and market expectations, accounting 20% and 24.4% respectively. 

  • Looking ahead, Optimax aims to grow organically in FY25 by optimising operating theatre (OT) utilisation and temporarily halting further expansion.

  • After incorporating the FY24 audited figures, we did some housekeeping but maintain our earnings forecasts.

  • Re-iterate BUY recommendation with an unchanged TP of RM0.69, pegged to 22.0x P/E multiple on FY25F EPS of 3.1 sen, and ascribed with three-star ESG rating.

 

Within expectations. Optimax’s 1QFY25 core net profit (CNP) of RM3.4m (+14.5% yoy, +12.0% qoq) came in within our and consensus full-year forecasts, accounting for 20.3% and 24.4%, respectively. Despite being just 20.3% of our full-year forecast, as we consider 1Q to be seasonally weaker.

 

YoY. Optimax's 1QFY25 core net profit (CNP) increased by 14.5% yoy to RM3.4m. This is notable as the first quarter for Optimax is typically seasonally weaker, particularly since this quarter included two major festivities: Chinese New Year and Hari Raya. Despite that, the Group managed to further drive its profitability in this exceptional quarter. This performance was primarily driven by effective marketing efforts and contributions from new satellite clinics and centres opened last year.

 

QoQ. Revenue declined 11.8% qoq due to the typically quieter nature of this period. Staff costs dropped 24.4% qoq, largely a reflection of better bonus payouts in prior quarters for employee compensation. Overall expenses were modest and began to normalise.

 

Outlook. Looking ahead, Optimax aims to grow organically in FY25 by optimising operating theatre (OT) utilisation and temporarily halting further expansion. The ambulatory care centers (ACCs) opened in 2H FY2024 at Atria Mall (PJ) and in Cambodia have remarkably achieved self-sustaining operations. Consequently, we anticipate that the next few quarters, typically less impacted by major festivities, are likely to help Optimax align with our full-year forecasts. However, we expect Cambodia's revenue to be impacted in the coming quarter due to the weakening USD against MYR.

 

Updates on Selgate Hospital and Kempas Hospital. Construction activities are ongoing at both hospitals. As per the guidance provided in the last analyst briefing, Selgate Hospital's construction is projected for completion in 4QFY25, with operations commencing in 1H26. Kempas Hospital is anticipated to complete construction in 1H26 and begin operations in 2QFY26. Management has indicated that no further guidance is available on this timeline, as the application for the operating license and the hiring process can only commence upon the successful completion of construction.

 

Earnings Revision. After incorporating the FY24 audited figures, we did some housekeeping but maintained our earnings forecasts.

 

Valuation. We reiterate our BUY recommendation with an unchanged TP of RM0.69/share, pegged to 22.0x PE multiple on FY25F EPS of 3.0 sen. This valuation incorporates a 0% ESG factored premium/discount based on its three-star ESG rating. We remain confident in Optimax’s prospects, supported by the Group's market-leading position in cataract and refractive surgeries, advanced medical technology, and its newly self-sustaining ACCs.

 

Risk. (i) Exposed to foreign exchange risk with potential short-term increases in material costs and freight charges, (ii) Changes in hospital agreements.

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Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

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