• Optimax Holdings Bhd (Optimax) is an eye specialist services provider with established track record, offering a range of eye surgeries and services across its network of 13 eye specialist centres in Malaysia.

• Having a strong presence throughout Peninsular Malaysia and Sarawak, Optimax is now eyeing on expansion to East Malaysia. The solid revenue growth was underpinned by the increase in surgeries and surgeons.

• We initiate coverage on Optimax with a BUY call at a target price of RM2.05, based on 40.0x P/E pegged to its forward FY22f EPS of 5.1x sen.

Investment Highlights

• Solid revenue growth backed by increasing surgeries conducted. Optimax outperformed its peers (ISEC and Topvision) with remarkable revenue growth, registering an 18.0% CAGR in 2016-2020. The growth was backed by increased number of surgeries conducted, which signifies the group is capturing market share in tandem with its increasing number of resident surgeons.

• Ongoing expansion of eye specialist centres. Optimax currently operates an extensive network of 13 eye specialist centres, being the widest in Malaysia. Following the recent conversion of Klang and Seremban eye specialist clinics into ACC, Optimax is actively seeking for expansion towards east coast in Peninsular Malaysia as well as East Malaysia. We believe the expansion plan, coupled with its intention to set up satellite clinics will expand its customer base further.

• Riding on the increasing population. Malaysia’s population of people aged 50 and above is projected to grow at a CAGR of 5.2% in 2020-2025. The demographic structure shift to an aging population may increase the demand for eye specialist services and thus benefit the eye care industry. Being an essential services provider with established track record since 1995, we believe the group is likely to thrive in the post-Covid-19 economy in tandem with the increasing demand.

Source: Mplus Research - 25 Mar 2021