KUALA LUMPUR (June 26): ACE Market-bound DC Healthcare Holdings Bhd, a specialist in aesthetic medical services, has priced its initial public offering (IPO) at 25 sen per share with the aim of raising RM49.81 million for working capital and repayment of borrowings.
At 25 sen per share, DC Healthcare is valued at 26.04 times price earnings based on its profit after tax of RM9.56 million for the financial year ended Dec 31, 2022.
Its share capital will be enlarged to 996.3 million shares under its flotation exercise and it is expected to have a market capitalisation of RM249.08 million upon listing, which is scheduled for July 17.
DC Healthcare primarily provides aesthetic services, general medical services, and the sale of skincare products, and has a market presence in Negeri Sembilan, Selangor, Johor and Kuala Lumpur.
At the launch of its prospectus on Tuesday (June 27), the group said that RM17.01 million or 34.15% of the amount raised would be allocated for working capital including staff salaries, medical supplies and consumables and RM6.24 million (12.52%) to repay borrowings.
It has also allocated RM9.44 million (18.95%) for establishing eight aesthetic medical clinics in Johor, Melaka, Negeri Sembilan, Pulau Pinang, Perak, and Kedah, and RM13.12 million (26.35%) to purchase medical machinery and equipment. The remaining RM4 million (8.03%) is for listing expenses.
Its listing exercise will entail the public issuance of 199.26 million shares, representing 20% of the group’s enlarged issued share capital. Of this, the bulk or 119.57 million shares will be allocated for private placement to selected investors.
A total of 24.9 million shares each will be allocated to public investors, and Bumiputera public investors, and another 29.89 million shares reserved for eligible directors and employees.
The IPO will also entail an offer for sale of 99.63 million shares or 10% of the enlarged share capital to selected investors.
According to DC Healthcare's prospectus, the group does not have a formal dividend policy.
Commenting on potential inflation and slower economic growth in the second half of 2023, managing director Dr Chong Tze Sheng said that the group is confident of weathering these challenges due to its performance during the pandemic.
“Based on historical growth, we can refer back to the year 2020 to 2022, I would say the whole country or the whole world was affected by Covid-19.”
“Despite the challenges, our historical data showed continuous growth despite Covid-19, so I believe this is something that we can refer back to our historical growth.”
“We hope we can have the same trend that we have, even better,” said Dr Chong in a press conference.
For its financial year ended 2022 (FY2022), its profit after tax (PAT) was RM9.6 million against RM4.6 million in FY2021. In the two preceeding years FY2020 and RY2019, its PAT was RM1.9 million and RM1.2 million, respectively.
Revenue for FY2022 amounted to RM52 million, more than double the RM25.5 million made in FY2021. For FY2020, it was RM14.4 million, slightly up from RM12.2 million in FY2019.
“The increase in revenue was due to the increase in the number of customers, the treatment that we provided for the customers, also the additional branches that we set up,” said chief finance officer Wilson Young.
“That’s why you can see significant growth in terms of our revenue of 2020-2021 and 2021-2022.”
The group added that the Malaysian aesthetic medicine market is projected to remain resilient in the long term, registering a compound annual growth rate (CAGR) of 18.8% based on the market size revenue of RM366.3 million in FY2021 to RM1.03 billion in FY2027 forecast.
M&A Securities is the principal adviser, sponsor, underwriter and placement agent for the IPO.