• Founded in 1995, Optimax Holdings Berhad (Optimax) is an established eye specialist healthcare group with 13 eye specialist centres in Malaysia, with a strong focus on refractive and cataract surgery.
• The long-term demand for eye specialist services is supported by several structural drivers (demographic, lifestyle, income growth) and the key players (Optimax and its competitors) are actively expanding their footprint to capture demand.
• Financially, Optimax Has Reported 34% Earnings CAGR Over 2016-19.
• At 10x 2019A PER, its valuation is lower than its closest comparable, ISEC’s 22x 2019A PER, and at a discount to its regional peers’ 89-203x.

An Established Eye Specialist Healthcare Group

Established in 1995 with the opening of its first eye specialist clinic in TTDI (Kuala Lumpur), Optimax now operates 13 eye specialist centres, supported by a team of 18 eye surgeons and 33 optometrists to provide a range of eye specialist services. The group has a strong focus on refractive and cataract surgery.

Positive Long-term Demand Outlook for the Eye Specialist Services

The demand for eye specialist services are supported by several structural changes, including: (i) growing and aging population; (ii) prevalence of lifestyle diseases (diabetes, hypertension); (iii) lifestyle changes (children are spending more time indoor reading, studying and glued to computer / smartphone screen); (iv) rising affluence; (v) higher penetration of medical insurance; and (vi) increase in medical tourism.

Competition Landscape: the Key Players Are Actively Expanding

The number of ophthalmologists per million population in Malaysia has increased from 13-15 during 2010-13 to 19 currently, but the density is still below the global average. Half of the 626 ophthalmologists in Malaysia are now working in the private sector. There are four key eye specialist healthcare groups in Malaysia (ISEC, Optimax, Vista, TopVision), and all players are actively expanding their footprint by acquiring or building new eye specialist centres.

Revenue Grew by 28% CAGR Over 2016-19, Valuation Is Below Peers

Optimax’s revenue/net profit had grown by 28% / 34% CAGR over 2016-19, driven by organic growth and contributions from new eye specialist centres. The group is asset-light and reported ROE of 24-52% in 2017-19. At 10x 2019A PER, Optimax’s valuation is lower than the closest comparable, ISEC’s 22x 2019A PER and below the regional peers’ 89-203x.

Source: Affin Hwang Research - 16 Jul 2020