This article first appeared in The Edge Malaysia Weekly on May 8, 2023 - May 14, 2023

IN the more than 2½ years since eye specialist service provider Optimax Holdings Bhd made its debut on Bursa Malaysia’s ACE Market in August 2020, it has accomplished many things.

For one, Optimax transferred its listing status to the Main Market last November. The bump to the Main Market has generated interest among institutional funds, where some are now keen to look into investing in the company.  For another, it has been expanding operationally, adding more eye specialist centres to its portfolio of 11 ambulatory care centres (ACCs) and one specialist hospital at the point of its initial public offering. It now has 13 ACCs and three satellite clinics.

It is poised to open four ACCs and seven satellite clinics this year and the construction of an eye specialist hospital in Kempas, Johor, is expected to be completed by 2025.

In efforts to achieve its plans to grow in the region, the group is ready to test the waters with an eye clinic in Cambodia and a satellite clinic in Singapore by the fourth quarter of this year.

Optimax executive director and CEO Sandy Tan Sing Yee tells The Edge that the Cambodian market has potential, with its big and young population.

“We are investing about RM10 million in the clinic in Phnom Penh, which includes equipment and rental of premises. Cambodians in Phnom Penh are wealthy and willing to spend on refractive and cataract surgeries,” she says.

Notably, refractive surgeries — which reduce or eliminate dependence on prescription glasses or contact lenses — have become popular among those in their 20s.

Instead of hiring local doctors for its Cambodian clinics, however, Optimax will fly in resident doctors from Malaysia on a rotation basis. Sandy, 36, concedes that this approach would mean higher overhead costs, but she says the company can charge rates similar to those in Singapore — in the S$12,000 (RM40,235) range. As such, the conversion rate alone renders Cambodia a lucrative market for the eye specialist service provider.

“In Malaysia, patients may pay about RM12,000 for refractive surgeries, but in Singapore and Cambodia, they cost around S$12,000. Because our patients from Cambodia have been referring their friends and family to us, we have been seeing 30 to 40 patients from Cambodia per month since last year,” Sandy says, adding that this growth in business is pushing the company towards its first international venture.

Meanwhile,  the goal for its soon-to-be-operational Singapore satellite clinic is to feed patients into the eye specialist hospital in Kempas. “We want the hospital to be as good as, if not better than, the Singapore National Eye Centre. Whatever technology they are using, we will also have it here in Malaysia. The difference will lie in the pricing. We are cheaper, because our land is cheaper and our location is good,” says Sandy.

The new eye specialist hospital in Kempas will be located across from the Johor Baru-Singapore Rapid Transit System (RTS) Link station, she says. “At the moment, we have one satellite clinic in Sutera, Johor, and another in Johor Baru, and we’re already seeing many Singapore patients who are in Johor for refractive surgery. We want to set up a satellite clinic in Singapore so that our patients can do their subsequent check-ups there instead of coming all the way to Johor.”

Sandy adds that Optimax has preliminary plans for Vietnam as its next international destination.

While many would say the company’s expansion plan is aggressive, she believes the time is right for Optimax, given the potential and its branding power. It has allocated RM25 million to RM30 million for its expansion plans this year, to be funded internally.

She acknowledges, however, that the company’s expansion depends on its ability to hire ophthalmologists.

The company’s larger ACCs have managed to break even in six months, and the smaller ones, which have only one operating theatre, in two months. Each ACC costs between RM3 million and RM5 million, depending on its size.

“Our internal target for a small ACC to break even is six to nine months; for the bigger ACCs, it is one to 1½ years. We have been able to break even earlier because of our aggressive marketing strategies,” says Sandy.

She adds that Optimax is undaunted by the uncertain economic outlook because people will still go ahead with their cataract or refractive surgeries despite an economic slowdown.

“It is interesting that after the Covid-19 pandemic, we saw a much higher trend of people wanting to do refractive surgeries compared with pre-Covid-19 days. It is close to triple the number,” she notes, surmising that people are beginning to understand the importance of eye care.

Sandy believes Optimax can stay ahead of its competitors because of its emphasis on cutting-edge technology. Optimax is the only eye care centre in the country that has all four generations of refractive surgery equipment under one roof.

“Every individual’s eyes are different,” she explains. “The latest technology may not necessarily be the best for you because your condition differs from someone else’s and could require a different solution.”

In Malaysia, companies that are similar to Optimax include LEAP Market-listed TOPVISION Eye Specialist Bhd, which does not provide refractive surgery. There is also ISEC Healthcare Ltd, which is listed on the Singapore Exchange’s Catalist and operates in Malaysia, focusing largely on eye diseases.

The outlook for Optimax looks promising, says Sandy. The company is confident of seeing revenue and earnings growth of about 20% this year on account of its aggressive expansion plan.

Optimax posted net profit of RM16.41 million in FY2022, up 25.3% year on year, from RM13.1 million; and revenue grew 21.5% y-o-y to RM108 million, from RM88.9 million.

Its share price has fallen 8.92% year to date to close at 71.5 sen last Wednesday, valuing the company at RM386.1 million. Its forward price-earnings ratio stands at 21.67 times and it has an indicative gross dividend yield of 3.36%.

The company’s largest shareholder, with a 29.21% stake, is Sena Healthcare Services Sdn Bhd — the family vehicle of Tan Sri Tan Boon Hock, who is the non-independent executive director and deputy chairman of the group as well as Sandy’s father. Boon Hock holds a 26.68% direct stake in the company. 

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