PETALING JAYA: Big Caring Group Bhd (BCG) is expected to sustain strong earnings growth over the next three years, underpinned by an expanding pharmacy network, improving margins and lower financing costs following its initial public offering (IPO), according to MBSB Research.
The group’s core net profit for the financial year ended Dec 31, 2026 (FY26) rose 67.3% year-on-year (y-o-y) to RM213.8mil, while revenue increased 17.9% y-o-y to RM4.02bil.
MBSB Research forecasts core net profit of RM293.6mil in FY27, RM368.7mil in FY28 and RM433.9mil in FY29, representing a compound annual growth rate of 26.6%.
Additionally, the projected growth is expected to be driven by new outlet openings, same-store sales growth (SSSG), margin expansion and annual interest savings of RM26.3mil following the repayment of RM570.7mil in borrowings using IPO proceeds.
BCG’s gross margin improved to 30.1% in FY26 from 25.7% in FY25 on a comparable basis, supported by a full-year contribution from Medispec, which recorded a gross margin of 51.7%, and better purchasing terms following the integration of BCG’s procurement into the group.
MBSB Research noted that BCG is the only pharmacy retailer in Malaysia with manufacturing, importing and distribution capabilities. Its “others” segment contributed 7.1% of FY26 revenue but accounted for 12.5% of gross profit, while its earnings before interest, taxes, depreciation and amortisation margin improved to 13.7% from 11.2% in FY25.
On the retail front, BCG targets to open 40 to 50 new outlets annually over the next three to five years, with capital expenditure of RM280,000 to RM420,000 per outlet, excluding inventory.
The group opened 58 outlets in FY26 and another 12 between July and September 2026.
Its FY26 SSSG stood at 7.3%, with MBSB Research expecting the group to sustain growth of 7% to 9% over the next three years, supported by demand for chronic disease treatments and repeat prescriptions shifting from hospital dispensaries to retail pharmacies.
The research house also highlighted room for expansion in less-served markets, particularly the Kelantan, Terengganu, Pahang, Sabah and Sarawak, where outlet penetration remains lower.
Meanwhile, the IPO proceeds earmarked for debt repayment are expected to reduce finance costs to RM64.8mil in FY27 and RM49.4mil in FY28, from RM88.5mil in FY26.
BCG estimates annual interest savings of RM26.3mil from the repayment, while MBSB Research expects its effective tax rate to ease from 34.2% in FY26 to 28% by FY29.
Earnings will also benefit from a smaller minority interest following the expected Yanling buyout.
Beyond organic expansion, BCG completed the RM32.5mil acquisition of 10 iCare Pharmacy outlets in September 2026 and agreed to acquire a 76% stake in Singapore-based Yeap Medical Supplies for RM51.1mil in October, marking its first expansion outside Malaysia.
MBSB Research derived a fair value of RM1.20 for BCG, based on 24 times its FY28 forecast earnings per share of five sen, implying an upside potential of 11.1% from its IPO retail price of RM1.08.
