With the continuous development of society and economy, more and more individuals are choosing to marry and start families later in life. However, as age increases, fertility naturally declines, prompting many to turn to assisted reproductive technologies (ART) to achieve their dream of parenthood. Alpha IVF Group Berhad (ALPHA, 0303), a fertility center led by a team of experienced reproductive specialists and embryologists, has become a beacon of hope for many modern families.

According to research, ALPHA’s in vitro fertilization (IVF) success rates have reached global benchmarks, with the company achieving a remarkable 82.5% pregnancy success rate (implantation rate of 63.0%). In contrast, only about 1.0% of assisted reproduction centers worldwide have success rates exceeding 80.0%. To provide some context, IVF stands for in vitro fertilization, commonly known as “test-tube baby,” and is a form of assisted reproductive technology. Since its inception in the 1970s, the success rate of IVF has steadily increased from around 10.0% to over 80.0% today, thanks to innovative treatment protocols and advanced technologies.

The IVF process includes several key steps: ovarian stimulation, egg retrieval, sperm collection and processing, fertilization in vitro, embryo culture, embryo transfer, and embryo cryopreservation. Notably, ALPHA boasts a 100.0% success rate consecutively in embryo cryopreservation, and has been recognized by the Malaysia Book of Records. While IVF has helped countless couples overcome infertility to fulfill their dreams of having children, the success rate can still vary based on several factors, including the woman’s age and health condition.

Now, let’s delve into the company’s background. ALPHA was founded in 2011 by Dato' Dr. Colin Lee, headquartered in Kota Damansara, Selangor. Dr. Lee, with 32 years of medical experience, serves as a consultant in obstetrics and gynecology with a specialization in reproductive technologies, particularly laparoscopic surgery and pre-implantation genetic diagnosis (PGD). In addition to founding ALPHA, Dr. Lee is also the founder of TMCLIFE (Stock Code: 0101). On March 22, 2024, ALPHA successfully listed on the ACE Market of Bursa Malaysia, making headlines as it debuted with a market capitalization of approximately RM1.6 billion, the highest in the history of the ACE Market.

Currently, ALPHA operates four fertility centers—one in Selangor, one in Kuala Lumpur, one in Penang, and one in Singapore—primarily focused on providing IVF services. In addition to IVF, these centers offer a range of other assisted reproductive procedures, including Intracytoplasmic Sperm Injection (ICSI), Intrauterine Insemination (IUI), various diagnostic, testing, and screening procedures, as well as cryopreservation of eggs, sperm, and embryos to support ART services.

According to the company’s prospectus, ALPHA’s primary revenue comes from providing assisted reproductive services, which accounted for approximately 93.9% of total revenue in the fiscal year 2023. The remaining income is derived from the provision of specialized medical services, laboratory services, and related services at third-party medical centers.

Financially, ALPHA has shown exceptional performance over the past few years, with both revenue and net profit exhibiting significant growth. The company’s revenue grew from approximately RM62.1 million in FY2021 to RM137.5 million in FY2023, representing an increase of around 121.5%. Net profit rose dramatically from RM2.3 million to around RM54.8 million, an astonishing growth of 2,282.6%.

It’s worth noting that over the past three years, ALPHA’s gross and net profit margins have been on an upward trajectory. The gross profit margin increased from 44.2% in FY2021 to approximately 55.8%, while the net profit margin surged from 3.27% to around 39.9%. Clearly, ALPHA’s services offer significant competitive advantages and added value in the market, enabling the company to command higher prices.

ALPHA’s recent performance has also been impressive. For the first three quarters of FY2024, the company’s revenue and net profit have continued to grow steadily. In the most recent third quarter, the company reported revenue of approximately RM46.7 million and a net profit of around RM14.0 million. The cumulative net profit for these three quarters was approximately RM39.8 million, representing about 72.6% of the total net profit for FY2023. If this trend continues, FY2024 is expected to outperform FY2023.

Looking ahead, ALPHA plans to expand into China and Indonesia, two of the world’s most populous countries. The company intends to establish more specialized centers and four satellite clinics in major cities across Indonesia, while opening two sales offices in China to drive marketing efforts and customer acquisition, marking its aggressive expansion into international markets.

Lastly, with a current share price of RM0.32, ALPHA’s price-to-earnings (P/E) ratio is approximately 29.3 times. Compared to peers like TMCLIFE, ALPHA’s valuation appears reasonable. Furthermore, ALPHA’s 60.0% dividend policy is likely to attract numerous dividend investors.

So, readers, will you consider adding this promising stock to your investment portfolio?

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Disclaimer: The above is purely for educational purposes and reflects personal opinions. It does not constitute any buying or selling recommendations.

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