Optimax’s high margin surgery mix to lead growth

KUCHING: Eye specialist service provider Optimax Holdings Bhd’s (Optimax) higher-margin surgery mix is expected to lead its growth moving forwards says analysts at Maybank Investment bank Bhd’s research arm, Maybank Research.

In a recent company report, the research arm noted that Optimax’s surgery mix has seen some changes of late as its refractive surgery volume was observed to have grown by 5 per cent year on year (y-o-y) while its cataract surgery volume contracted by 2 per cent y-o-y during its financial year 2023 (FY23) period.

The growth in refractive surgery was largely attributed to the introduction of the group’s new ‘ZEISS Smile Pro’ procedure during the end of its 2023 third quarter (3Q) which saw refractive surgery volume surging by 9 per cent y-o-y during the subsequent quarter (4Q23)

In FY23, the group’s refractive surgery and cataract surgery segments contributed to 37 per cent and 32 per cent of its total revenue, respectively.

“This is positive as the refractive segment gives higher revenue per surgery and offers greater volume growth capacity given its tech-sophistication and short surgery time, under 10 seconds for refractive laser treatment,” said the research arm.

“We also continue to be optimistic on Optimax’s new high-margin plastic surgery segment, as volume growth is leading to a second operating theatre (OT) launch in April 2024 in its Atria ambulatory care centre (ACC), where two out of four OTs will be dedicated to plastic surgery,” they added.

The shift to a higher-margin surgery mix would bode well for Optimax’s earnings growth moving forward, especially with the group’s ambitious pipeline of slated new facilities.

Optimax’s newest satellite clinic in Taman Melawati has already begun operation while three new ACCs in Cambodia, Atria and Kota Kinabalu are slated to be operational by around March and April.

Barring no unexpected delays, the group’s total facility count would grow to 16 ACCs, 7 satellite clinics, and 1 specialist centre by 1H24.

And by 2H24, the group expects the construction of its Kempas eye Hospital and Setia Alam Hospital to be complete. They are targeting both facilities to be operational by early 2025.

“We are hopeful that these launches would ease pressure on GP and pre-tax margins that were hit by high pre-ops costs for pre-hiring of medical staff and renovation,” guided Maybank Research.

That said, the research arm expects these costs to only taper gradually as Optimax has guided that they have plans to hire more doctors ahead of their expansion plans.

All things considered, Maybank Research remained optimistic on Optimax’s outlook and maintain their earnings forecasts that the group will be able to register earnings of RM13 million in FY24 and RM17 million in FY25.