(From left) DC Healthcare Holdings Bhd chief financial officer Wilson Yong Yew Su, DC Healthcare independent non-executive director Yap Ee Ling, DC Healthcare medical director Dr Leong Chee Yong, DC Healthcare managing director Dr Chong Tze Sheng, DC Healthcare executive director Dr Lai Ngan Chee, DC Healthcare independent non-executive chairman Datuk Dr Mohd Noor Bin Awang, M&A Securities Sdn Bhd managing director, corporate finance, Datuk Bill Tan; DC Healthcare independent non-executive director Sim Lee San, and DC Healthcare independent non-executive director Rekha Palanysamy, at DC Healthcare’s Bursa Malaysia ACE Market debut on Monday, July 17, 2023. (Photo by Sam Fong/The Edge)

KUALA LUMPUR (July 17): Aesthetic medical services provider DC Healthcare Holdings Bhd’s share price opened at 40 sen on Monday (July 17) on its debut on the ACE Market of Bursa Malaysia, a 15 sen or 60% premium over its initial public offering (IPO) price of 25 sen.

At the closing bell, DC Healthcare gained 20 sen or 80% to settle at 45 sen, valuing the healthcare provider at RM448.3 million.

Mercury Securities Sdn Bhd and Apex Securities Bhd have both issued a “subscribe” recommendation on the group. Mercury gave a fair value (FV) of 60 sen based on earnings per share (EPS) of 2.5 sen and a price-earnings ratio (PER) of 24 times estimated for the financial year ending Dec 31, 2024 (FY2024), representing a 10% discount to the healthcare sector’s FY2024 PER.

Apex Securities ascribed a slightly lower FV of 57 sen based on an estimated 25 times PER for the company’s FY2024 EPS of 2.3 sen, in line with Bursa Malaysia’s healthcare index’s FY2024 PER (excluding glove counters).

Public Investment Bank Bhd assigned a FV of 37 sen that represents a P/E multiple of 16 times its financial year ending Dec 31, 2024’s earnings per share of 2.3 sen.

DC Healthcare’s listing exercise entailed the public issuance of 199.26 million shares, representing 20% of the group’s enlarged issued share capital, with 24.9 million shares each allocated to public investors and Bumiputera public investors, and 99.63 million up for sale to selected investors.

A bulk of 119.57 million shares will be allocated for private placement to selected investors.

The group’s public tranche drew orders worth RM759.92 million with a total of 17,614 applications received for 3.01 billion shares, representing an oversubscription of 59.46 times of the 49.82 million new shares offered for public subscription.

Meanwhile, 7,509 applications for 1.05 billion shares were received for the Bumiputera portion, representing an oversubscription rate of 41.27 times.

For the remaining public portion, 10,105 applications for 1.96 billion shares were received, representing an oversubscription rate of 77.65 times. Another 29.9 million shares were made available to eligible directors, and employees of DC Healthcare have also been fully subscribed.

Also fully taken up was the group’s institutional offering of 219 million shares — comprising the entire public issue of 199.56 million shares to selected investors by private placement, as well as the offer for sale of 99.63 million existing shares.

According to its prospectus launch earlier this June, the group has allocated RM17.01 million or 34.15% for working capital, RM6.24 million (12.52%) to repay borrowings, RM9.44 million (18.95%) to expand their clinics regionally, RM13.12 million (26.35%) to purchase medical machinery and equipment, and the remaining RM4 million (8.03%) for listing expenses.

DC Healthcare primarily provides aesthetic services, general medical services, and the sale of skincare products, and has a market presence in Negeri Sembilan, Selangor, Johor and Kuala Lumpur.

Regarding financial results, DC Healthcare posted a net profit of RM2.4 million for the first quarter that ended March 31, 2023 (1QFY2023), and revenue stands at RM16.8 million, with 88.8% of it coming from aesthetic services.

For its financial year ended 2022 (FY2022), its profit after tax (PAT) was RM9.6 million against RM4.6 million in FY2021. In the two preceding years, FY2020 and RY2019, its PAT was RM1.9 million and RM1.2 million, respectively.

Revenue for FY2022 amounted to RM52 million, more than double the RM25.5 million made in FY2021. For FY2020, it was RM14.4 million, slightly up from RM12.2 million in FY2019.

M&A Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for this IPO.

Read also:
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PIVB assigns 37 sen fair value to ACE Market-bound DC Healthcare, 48% upside to IPO price
DC Healthcare sets IPO price at 25 sen per share to raise RM49.81m