Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on May 2, 2022 - May 8, 2022

AS the nation’s economy picks up amid further easing of pandemic containment measures, eye specialist provider Optimax Holdings Bhd’s expansion goal of a well-connected nationwide network of outlets appears to be on track.

CEO Sandy Tan tells The Edge Optimax is optimistic about its rate of surgeries as refractive and cataract procedures continue to be the group’s main revenue contributors.

“Since the government announced the National Recovery Plan last June, which relaxed certain restrictions, we have seen a gradual recovery in the number of patients for cataract procedures and refractive surgeries, chief of which are Laser Vision Correction and Implant Vision Correction,” says Tan.

“With the ageing of the Malaysian population, we believe there is ample room for the number of surgeries to continue to grow strongly,” she says, adding that patients who had postponed refractive and cataract surgeries due to pandemic-induced movement restrictions are now pushing up the rate of surgeries.

Optimax plans to capitalise on growth in elective procedures by setting up several satellite clinics and an ambulatory care centre (ACC) network to connect major states and enhance its geographical reach.

Tan says rising consumer affluence has had a positive impact on discretionary spending on elective services such as refractive surgery to correct vision problems, and oculoplastic for cosmetic reasons.

Optimax, which debuted on the ACE Market in August 2020, currently has 13 eye specialist centres in Malaysia comprising a specialist hospital and 12 ACCs.

The group targets to roll out new ACCs and satellite clinics on the East Coast this year, and a new specialist hospital in Johor by 2024. A new ACC in Bahau, Negeri Sembilan, is under renovation and slated for completion in the second quarter. It is expected to commence operation by end-2Q or 3Q. The group’s first satellite clinic, in Taman Sutera Utama in Skudai, Johor, is in the works for a 2Q launch, while three other satellite clinics are slated to open in the Klang Valley in 2H2022.

“Our expansion to the East Coast by way of setting up satellite clinics is to form an ACC network to connect the major states. The satellite clinics will enhance our geographical coverage by allowing patients in remote areas requiring surgery to be referred to our surgeons at the nearest ACC. These clinics will provide eye examination and consultation services and drive additional patient volumes to our ACCs and hospital,” Tan says.

Optimax also expects to capitalise on rising demand for eye specialist services in Malaysia via a memorandum of understanding signed last December with private healthcare operator Selgate Healthcare Sdn Bhd. Under the MoU, Selgate will lease floor space to Optimax to operate eye specialist centres for designated Selgate hospitals at agreed rates and tenures.

With the necessary approvals from the Health Ministry,  Optimax is looking to set up specialist clinics at Selgate’s upcoming Kuala Selangor and Mont’Kiara hospitals, Tan shares.

Geographically, the Central Malaysia region — comprising Selangor, Kuala Lumpur and Negeri Sembilan — remains Optimax’s largest revenue contributor for the financial year ended Dec 31, 2021 (FY2021), accounting for 66.36% of the group’s revenue.

“The region’s six outlets — the group’s highest number of ACCs — contribute substantially to our group revenue,” says Tan.For 4QFY2021, Optimax’s net profit jumped 78.5% to RM3.57 million from RM2 million in 4QFY2020. Revenue rose 54.7% to RM26.6 million from RM17.2 million.

In a bourse filing, Optimax said the improved earnings were due to a gradual recovery in its number of patients following the easing of movement restrictions. In addition, the group’s  participation in the national vaccination programme (PICK) and MyMedic@Wilayah, which were organised by ProtectHealth Corp Sdn Bhd and Kementerian Wilayah Persekutuan respectively, gave it a new revenue stream from the provision of vaccination services.

“There is still spillover effects from the two programmes as the group is still involved in administering booster jabs during the current financial quarter,” Optimax said in the filing.

Optimax will be hiring one new doctor for each of its new satellite clinics, but is not planning to increase procedure prices. “We want our prices to be broadly on a par with those of our competitors, and not lose patients,” Tan explains.

Optimax recruits doctors through its fully-owned new ACCs, where employee doctors are hired as resident doctors, or through business associate arrangements with jointly-owned new ACCs, where Optimax’s resident doctors are given equity participation while the group maintains the majority share.

The company paid out an interim tax-exempt dividend of 1.9 sen per share amounting to RM5.13 million for FY2021 on Nov 24, 2021, and a second interim tax-exempt dividend of 1.9 sen on March 26 this year.

“While Optimax does not have a fixed dividend policy at present, the group has declared total dividends of 3.8 sen per ordinary share for FY2021. The total payout of dividends for the financial year under review is RM10.26 million, representing a total payout ratio of 78% to the company’s FY2021 net earnings,” says Tan.

Optimax’s shares climbed 19.6% to RM1.22 last Thursday from RM1.02 on March 8, valuing the company at RM329.4 million.

 

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