DC Healthcare profit forecast to rise substantially

PETALING JAYA: Aesthetic services provider DC Healthcare Holdings Bhd’s net profit is expected to increase by more than half to RM15mil for the financial year 2023 (FY23).

The group plans to set up seven new outlets in the second half of this year from 13, as demand for skin and aesthetics services remain robust.

For FY24 and FY25, earnings are anticipated to grow by 47% and 37%, respectively, with a healthy net profit margin of 20% and 19%, said TA Research.

The research house expects growth to be facilitated by 15 new outlets per year. The capital expenditure per store is around RM1.5mil to RM2mil with a payback period of six months.

TA Research believes the group will focus more on its body contouring business due to higher demand and superior margins.

The company, which is en route to a listing, plans to raise RM49mil to fund its growth plans.

Its initial public offering price is at 25 sen per share. DC Healthcare is priced at a trailing price-to-earnings ratio of 26.1 times against its FY22 earnings per share.

DC Healthcare was set up in 2016 with the launch of its first “Dr Chong Clinic” in Kepong. This quickly became synonymous with non-invasive and minimally invasive treatments for skin and beauty.

It is headed by group founder and managing director, Chong Tze Sheng. He has about 12 years of experience in aesthetic medical services.

There were about 100 aesthetic medical providers in the country as of 2022. According to independent market research conducted by Protégé, the revenue of the aesthetic medical providers in Malaysia grew at a compounded annual growth rate (CAGR) of 30% (from FY19 to FY21).

This is so as consumers become more aware of the importance of appearance and are willing to splurge to enhance their looks.

The aesthetic medicine market is expected to remain resilient over the long run and register a CAGR of 18% from RM366mil in 2021 to RM1.03bil in 2027.

Future demand may help boost demand for aesthetic treatments, including higher interest in beauty as well as increasing demand and awareness of aesthetic medical technologies, rising disposable income and ageing population.

DC Healthcare does not have a formal dividend policy. TA Research assumes a dividend payout of 30% across FY23 to FY25. It projects dividend yields to be 1.8% to 3.7%.

(Source: The Star, https://www.thestar.com.my/business/business-news/2023/07/04/dc-healthcare-profit-forecast-to-rise-substantially)