While CGSI Research is confident in Optimax’s prospects for FY25, it expects to see growth moderation in FY26.
PETALING JAYA: Optimax Holdings Bhd
is expected to hit record profits for its financial year 2025 (FY25) as the group’s three new ambulatory care centres (ACCs) begin to contribute profits in their first full year of operations.
The group’s heavy investments to set up new ACCs in Petaling Jaya’s Atria Mall, Kota Kinabalu (KK) and Cambodia in FY23, had resulted in a 13% rebound in net profits in FY24.
CGS International (CGSI) Research in a report said: “We believe strong demand in these ACCs for laser eye surgery, namely Lasik and Presbyond, combined with patients opting for higher-value operations, would allow these new ACCs to contribute and lift Optimax’s profit in FY25 to a new high.”
At the group’s recent results briefing, Optimax shared that its Atria Mall and Cambodias ACCs had reached pre-tax profit breakeven in the second quarter of FY25, while its KK ACC had achieved earnings before interest, taxes, depreciation and amortisation breakeven.
While the research house is confident in Optimax’s prospects for FY25, it expects to see growth moderation in FY26.
“We expect the group to incur higher costs as it sets up operations in Selgate Hospital and Kempas Hospital, which are currently under construction and slated to be opened in FY26.
“This would include higher staff costs and depreciation expenses, which we think would lead to its core net profit growth slowing down to 4.6% in FY26, before growing a further 11% in FY27 as the operations in these hospitals ramp up,” it noted.
Optimax is planning for further regional expansion in Indonesia and Vietnam, building on the success of its maiden venture in Cambodia, as it sees demand rising in these countries.
“We believe these plans would only be finalised by the end of FY25 and operations there will commence some time in FY26, in which we have incorporated the start-up costs for the regional expansion in our numbers for FY26,” the research house said.
CGSI Research has cut its earnings forecasts for Optimax, keeping its add” call on the stock with a lower target price of 81 sen.
“Despite this positive earnings outlook, the stock has fallen 25% over the past year on the back of disappointing earnings delivery and now trades at a deeply discounted 15.8 times FY25 price-to-earnings.
“We believe investor sentiment could recover as earnings momentum strengthens,” said CGSI Research.
The downside risk factors include delays in its expansion plans and a longer gestation period for its new centres.
