Investment Highlights

• We maintain BUY on Apex Healthcare (Apex) with a higher fair value (FV) of RM3.45 (from RM3.33), based on an unchanged PER of 23x on FY22F EPS. We make no ESGrelated price adjustment for our rating of 3 stars.

• Earnings estimates increased. FY22/FY23 earnings have been increased by 4% each to RM71.5mil/RM74.9mil. We have assumed better sales volume for its pharmaceutical products. This is to reflect the improved demand for pharmaceuticals products from the private sector in both Malaysia and Singapore.

• Apex’s FY21 net profit of RM59.4mil came in better than expected. It accounted for 119% and 109% of our and consensus earnings forecasts respectively. A total dividend of 9 sen was announced which is higher than expected. This included the 6 sen dividend which was declared in conjunction with the company’s 60th anniversary.

• 4QFY21 earnings climbed 48% QoQ and 44% YoY to RM20.7mil. The improvement in earnings was supported by stronger market demand for pharmaceuticals, consumer healthcare products and medical devices. YoY, FY21 earnings increased by 6% to RM59.4mil supported by a revenue growth of 10% to RM770.8mil.

• Positive outlook. We believe that the demand for pharmaceutical products has improved from both private sector clinics and pharmacies in FY22.

• Maintain BUY. Apex Healthcare has positioned itself well to benefit from the megatrends of ageing population, public health education advancement and steady healthcare expenditure increase. Also, the company will not be affected by the prosperity tax. We forecast an FY22 PBT of RM86.4mil (less than RM100mil).

Source: AmInvest Research - 24 Feb 2022