PETALING JAYA: Despite cautious consumer spending, Focus Point Holdings Bhd
remains confident of achieving higher sales this year.
This optimism is underpinned by resilient demand for optical products amid increasing eye disorders, particularly among the elderly population, in Malaysia as well as inclination towards latest fashion trends.
In its recent report, TA Research noted that Focus Point was not sitting on laurels after achieving commendable sales from its optical segment in 2022.
The brokerage said the group was looking to secure more new corporate clients, which would usually provide stable recurring sales.
“Management targets to open 12 new optical outlets in 2023, mostly in the Klang Valley region.
“Note that Focus Point had a net opening of nine optical stores (15 new outlets but closed six outlets) in 2022,” TA Research said.
Last year, Focus Point’s optical segment saw sales grow 45.7% to RM202.6mil, driven by increase in the number of retail outlets, franchise sales and corporate sales.
TA Research maintained its “buy” recommendation on Focus Point with an unchanged target price of RM1.59, based on a price-earnings multiple of 16 times against the estimated earnings per share for 2023.
This followed the brokerage’s recent engagement with Focus Point’s management, whereby the group stated that it continued to expect sales to grow in 2023 despite the cautious consumer spending.
The group also revealed that it was securing new corporate clients in both the optical and food and beverage (F&B) divisions and that its Eye Specialist Centre, ExcelView, is now equipped with the most advanced SMILE technology.
“Management shared that the group has purchased the most advanced ReLEx SMILE technology to correct astigmatism and short-sightedness, costing about RM5mil.
“This will allow the centre to service more patients with eye care and visual problems,” TA Research said.
“Currently, we gather that ExcelView performed about 80 to 90 cases per month (turnover of RM500,000 to RM600,000 monthly) and is profitable. The group may open more eye specialist centres over the medium to longer term,” it added.
In the food and beverage division, TA Research noted that Focus Point’s central kitchen 1 (CK1) and central kitchen 2’s (CK2) current utilisation rate stood at 100% and 45%, respectively.
“Management shared that the group’s new corporate client, customer M, would lift CK2 utilisation rate to 80% this year.
“With that, customer M has the potential to be the group’s top revenue contributor (corporate client) for its F&B division.
“Moreover, we understand that petrol stations cafe outlets may likely come on board soon,” it added.
On expansion, two new Komugi outlets would likely be opened this year. This would add to the group’s current portfolio of 11 Komugi outlets in Malaysia.
“All in all, we project F&B division to grow by 24.2% in 2023, driven by higher orders from existing customers and potential new clients coming on board,” TA Research said.
Last year, Focus Point’s F&B division recorded revenue of RM36.9mil as compared to RM26.5mil in 2021 due to higher footfall to Komugi outlets post-pandemic, which boosted sales by 59.2% and higher corporate sales of 25.4%.
