PETALING JAYA: LAC Med Bhd
is projected to register 20%, 21%, and 13% earnings growth for financial years (FY25) to FY27 with a three-year compounded annual growth rate of 18.2%.
“The growth will largely be driven by organic hospital bed expansion projects in Malaysia and LAC’s own strategic expansion in Indonesia,” said RHB Research.
LAC specialises in the supply and integration of medical devices.
The research house sees strong cross-selling opportunities within its business offerings – primarily via Equipment-as-a-Service (EaaS) and S&M models as well as software and systems solutions, supported by client demand for better interfaces and patient outcomes.
It expects radiography and ultrasound to remain the group’s main revenue contributors accounting for about 70% of total revenue in FY26 to FY27, as such products are highly sought after by hospitals for diagnostic purposes.
RHB Research initiated coverage on the stock with a target price of RM1.14 a share based on 15.7 times 2026 price-to-earnings ratio, 18% upside with a 2% yield.
It has a “buy” call on the stock.
The key risks cited include regulatory changes, over-reliance on major suppliers, inability to secure new projects or purchase orders, and delays of projects or orders.
As at end-October 2025, LAC’s outstanding order book stood at RM195mil, of which RM128mil relates to the supply and integration segment, with the balance comprising plug-and-play equipment and medical consumables.
Orders within the supply and integration segment typically carry a delivery and execution period of three to nine months, reflecting the more complex mechanical and engineering works required for equipment integration.
Its tenderbook stood at RM741mil as at November 2025, providing a sizeable pipeline of potential wins.
This comprises RM395mil from hospital tenders, RM15mil from general practitioner clinics for ultrasound and X-ray products, and RM331mil from Abbott-related products.
“The combination of a firm order book and a sizeable tender pipeline provides strong visibility into near-to-medium-term revenue growth,” RHB Research said.
The research house expects LAC to maintain a dividend payout ratio of 30% of profit after tax.
