HLIB Research said Optimax’s strategic exposure to upcoming thematic plays in 2026 and 2027 could provide upside earnings surprises.
PETALING JAYA: Hong Leong Investment Bank (HLIB) Research has initiated coverage on Optimax Holdings Bhd
with a “buy” recommendation and a target price of 96 sen a share, valuing the counter at 30 times fully diluted financial year ending Dec 31, 2026 (FY26) earnings.
HLIB Research said the valuation reflected Optimax’s strong positioning in Malaysia’s fast-growing medical eye care industry and its transition into the “asset-milking” stage “characterised by margin recovery through economies of scale and progressive deleveraging”.
“While the 30 times price-to-earnings (PE) ratio represents a one standard deviation premium to its three-year mean of 25 times, we believe the premium is justified by Optimax’s transition into the asset-milking stage,” the research house said.
HLIB Research noted the company’s aggressive expansion between the third quarter of 2022 (3Q22) and 3Q24 had weighed on profit margins and its balance sheet, given that the nature of operating costs were front-loaded while revenue ramp-up came later.
However, starting 4Q24, it said Optimax was expected to drive a profit margin upcycle in the coming quarters.
“We believe this ongoing favourable shift in future quarters underpins a compelling case for renewed market interests.”
It added that Optimax’s strategic exposure to upcoming thematic plays in 2026 and 2027 – particularly the Malaysia Year of Medical Tourism (2026) and Johor’s next consumption wave in 2027 – could provide upside earnings surprises.
“That said, our target multiple remains broadly in line with the closest comparable domestically listed healthcare services provider peers’ average of 29 times 2026 PE,” HLIB Research said.
Optimax is a private eye specialist services provider with a network of 17 specialist centres – comprising 16 ambulatory care centres and one hospital – and eight satellite clinics in Malaysia and Cambodia.
Founded in 1995, the group offers a comprehensive range of ophthalmic services, including treatment for eye diseases and disorders (mainly cataract surgeries), refractive surgeries (laser and implant-based), oculoplastic surgeries and eye examinations.
Optimax is expected to achieve a three-year revenue compound annual growth rate (CAGR) of 10% for FY24 to FY27, broadly in line with the industry growth forecast of 9.8%.
Citing independent market researcher Protégé Associates Sdn Bhd, the research firm said Malaysia’s medical eye care industry revenue is expected to expand from RM850mil in 2024 to RM1.2bil by 2028.
“In tandem, we forecast a stronger three-year core profit after tax and minority interest (Patmi) CAGR of 19.8% (for Optimax), driven primarily by economies of scale as the group transitions into the asset-milking stage,” HLIB Research added.
The research house said the medical eye care industry is supported by several structural drivers, including an ageing population, rising prevalence of lifestyle-related eye disorders, increasing affluence, continued network expansion, greater awareness of the drawbacks of contact lens use, and a positive outlook for medical tourism.
Although Optimax does not have a formal dividend policy, HLIB Research stated the group has consistently rewarded shareholders since FY21.
Over the past three financial years, dividend payout ratios stood at 88.2% in FY22, 50.6% in FY23, and 54.4% in FY24.
