Maintain BUY

Optimax’s 1Q24 core net profit was in-line at 23% of our FY24E estimates and 19% of consensus in anticipation of new ACC ops and stronger surgery numbers. We make no change to our earnings forecasts. Optimax remains poised for growth with several strategic expansion soon-to-be operational. We maintain our BUY call with a revised DCF-based TP of MYR0.87 (+1sen) as we roll forward valuation to FY24E.

Earnings in-line; higher costs priced-in

Both core net profit of MYR3.0m (-1% YoY, -5% QoQ) and revenue of MYR28.2m (+8% YoY, -10% QoQ) came in-line at 23% of our FY24E estimates, on seasonally tapered surgery numbers in a festive-packed first quarter. Higher YoY staff costs (+9% YoY, -12% QoQ) and the incurrence of pre-op costs ahead of Cambodia ACC’s opening (+18% YoY, -19% QoQ) elevated operational costs in 1Q24, We have imputed these higher costs in our forecasts.

Centre openings underway

Surgery performance came in-line despite anticipated lower volumes in the quarter due to the festivities/holidays. Cataract surgery volume fell to 1,552 (-8% YoY, -13% QoQ; 21% of our FY24E), while blended refractive surgery volume (laser and implant) rose to 1,807 (+6% YoY, -11% QoQ; 24% of our FY24E). Key catalysts for growth will be surgery volume pick-up as the ACCs in Cambodia and Atria (PJ) start operating over the next 3-6 months, and costs normalise (from pre-op expenses and pre-hiring of medical staff).

Maintain earnings forecasts

We maintain our earnings forecasts with a revised TP of MYR0.87, having imputed higher operational costs and supported by resilient surgery volume from both local and foreign patients.

Source: Maybank Research - 29 May 2024