Summary

• Optimax Holdings Bhd’s (Optimax) 1QFY21 net profit fell 3.4% YoY to RM1.3m owing to a higher effective tax rates of 32.3%, due to non-deductible expenses incurred during the quarter. Revenue for the quarter, however, increased 10.8% YoY to RM14.5m on the back of recovering number of patients in March 2021 after MCO2.0, coupled with the on-going promotions offered by Optimax through online platform.

• Optimax’s net profit sank 38.3% QoQ due to reimplementation of MCO2.0 in January 2021 and February 2021 following a spike in Covid-19 daily confirmed cases, coupled with shorter business days for the quarter due to February month as well as festive season such as Chinese New Year. Revenue for the quarter contracted 15.8% QoQ to RM14.5m.

• The reported net profit came in at 12.5% of our previous estimated net profit of RM10.4m. Meanwhile, the reported revenue amounted to 19.8% of our previous revenue forecast of RM73.1m for the year.

• We foresee more surgeries to be postponed following the reimplementation of MCO3.0 in May 2021, which is expected to impact Optimax’s earnings as more than 90.0% of Optimax’s revenue was generated from eye specialist services. However, the impact of MCO3.0 may be less severe on the company in comparison to that of MCO1.0, as the restrictions imposed are less restrictive.

• Barring any further restrictions, we reckon Malaysia’s economy will likely to find firmer footing by 2H21, underpinned by the ongoing vaccination programme. Hence, we expect to see recovery in traffic footfalls for Optimax in 2HFY21, including patients for refractive surgeries and cataract surgeries who postponed their procedures earlier.

• Optimax remains committed on their expansion plan despite ongoing MCO, intending to (a) hire additional doctors in Seremban ACC (b) set up satellite clinics to provide eye examination and consultation services, and (c) expand its ACC network towards east coast and Peninsular and East Malaysia.

Source: Mplus Research - 27 May 2021