Those who subscribed to Alpha IVF Group Bhd’s IPO would have been disappointed over its lukewarm debut. The counter ended its maiden trading day on March 22 flat at 32 sen on the ACE Market of Bursa Malaysia. Good news is that the counter is looking to trend higher. Alpha IVF recently staged a bullish breakout and most likely to continue its good run.

Meanwhile, analysts have target price between 28 sen - 40 sen for the counter. If it does go to 40 sen, we are looking at 25% gain based on its IPO price. At 32 sen per share, the group was valued at about 21.92 times its price-earnings ratio, based on a net profit of RM54.79 million and basic earnings per share of 1.46 sen for the financial year ended May 31, 2023.

The fertility care specialist is already one of the largest listing on the ACE Market with a market capitalisation of RM1.55 billion but only saw a mere oversubscription of 2.73x. It raised RM116.6 million from this listing exercise for business expansion, which includes setting up new in vitro fertilisation (IVF) centres.

The proceeds are also meant for setting up satelite clinics, sales offices and upgrading of existing specialist centres, facilities and offices. It has attracted eight cornerstone investors namely; abrdn Malaysia, AHAM Asset Management, AIA Bhd, Eastspring Investments Bhd, Hong Leong Asset Management Bhd, Kenanga Investors Bhd, Lion Global Investors Ltd, and Value Partners Hong Kong Ltd.

Alpha IVF is seen as a beneficiary of the growing medical tourism business and increasing demand for IVF treatments amid declining birth rates. Coupled with the significant decline in sperm counts globally, the need for medical assistance in achieving pregnancy is on the rise.

It reported a net profit of RM12.21 million and RM38.54 million in revenue for 2QFY24. For the six months ended Nov 30, 2023, Alpha IVF posted a net profit of RM25.34 million, on the back of revenue of RM80.14 million.

This counter looks appealing given its specialisation in IVF treatments and chances for it to trend higher are high.