Maintain BUY

Optimax’s 9M23 PATMI makes up just 60% of our FY23E, with the shortfall due to higher-than-expected operating costs ahead of expansionary plans. We lower FY23E PATMI by 14% but maintain FY24/25E. We remain optimistic on Optimax, supported by healthy demand for eye healthcare and future expansions. BUY maintained with an unchanged DCF-derived TP of MYR0.86 (ke: 10.5%, LTG: 3%).

Impacted by pre-op, higher staff costs

3Q23 net profit of MYR2.8m (-23% YoY, -26% QoQ) raised 9M23 net profit to MYR9.7m (-11% YoY). 9M23 revenue rose 4% YoY (68% of our FY23E), while gross profit (GP) margin of 38.0% was within our 38.2% est. for the year. The lowball was mainly attributed to pre-operating costs and higher staff costs for advanced hiring ahead of satellite centre/ambulatory care centre (ACC) openings to ensure staff readiness, as well as further outreach of the plastic surgery business. 9M23 number of cataract/refractive surgeries remain in-line at 72%/75% of our FY23E estimates

Long-term growth prospects intact

We lower FY23E PATMI by 14% to reflect short-term higher costs but maintain FY24/25E. Over the next 18 months, Optimax will open a satellite clinic in Taman Melawati in 4Q23, and ACCs in Atria (PJ), Kempas (Johor), Kota Kinabalu, and Cambodia in 2024. Optimax also plans to offer its plastic surgery and aesthetic services in Atria ACC. Its collaboration with Selgate for the Setia Alam Hospital eye specialist centre is slatted for construction completion and opening by 4Q24.

Cautious yet excited

Optimax remains cautiously optimistic on resilient surgery numbers and favourable expansion prospects both locally and within the SEA region for FY23 and FY24. It has earmarked Cambodia and Vietnam as priority target markets for expansion to capture the growing demand for LASIK procedures.

Source: Maybank Research - 30 Nov 2023