KUALA LUMPUR: Maybank Investment Bank Bhd (Maybank IB) is upbeat about Optimax Holdings Bhd's long-term growth prospects following its memorandum of understanding (MoU) with Selgate Group of Hospitals to establish eye specialist facilities in its hospitals.
The bank-backed research firm also noted that there is potential for further domestic or regional growth for Optimax.
It noted that Optimax is expanding its network of eye specialist centres, with plans to open a new ambulatory care centre (ACC) in Bahau, Negeri Sembilan and a new eye specialist hospital in Kempas, Johor.
"We expect the Kempas hospital to be operational by the second half of 2024 and see it as a major contributor to future revenue.
"The expansion would be financed by its net cash position and steady cash flows," it said in a note.
Maybank IB said that with its conservative assumptions for revenue growth and anticipation of modest margin compression as a by-product of its ongoing expansion over the short-to-medium term, the firm forecast a three-year financial year 2021 (FY21)-FY24 net profit compound annual growth rate (CAGR) of 8.9 per cent in comparison to FY18-FY21 of 40.4 per cent.
"Reflecting Optimax's promising long-term growth prospects, we forecast a six-year FY24-FY30 revenue CAGR of 10 per cent derived from the operationalisation of its upcoming Kempas hospital and successful follow-through execution following the MoU with Selgate Group of Hospitals," it added.
Maybank IB has initiated coverage on Optimax Holdings with a 'Buy' rating and a target price of 74 sen, with a potential upside of 27 per cent due to the company's potential growth.
The research firm also assumed a dividend payout ratio of 60 per cent moving forward.
Optimax is the largest private pure-play provider of eye specialist services listed in Malaysia, providing treatment for eye disease and disorders and refractive correction surgeries.
It offers a diverse array of eye specialist services and has the broadest geographical presence in Malaysia with 13 specialist centres.
It is currently listed on the ACE Market of Bursa Malaysia but is expected to transfer to the main market by the fourth quarter of this year.