KUALA LUMPUR (July 5): Public Investment Bank Bhd (PIVB) has assigned a fair value of 37 sen to ACE Market-bound DC Healthcare Holdings Bhd, representing a price-earnings (PE) multiple of 16 times its financial year ending Dec 31, 2024 (FY2024) earnings per share of 2.3 sen.

This represents a 12 sen or 48% premium to its initial public offering (IPO) price of 25 sen a share.

In a research note on Wednesday, PIVB said it was expecting the aesthetic medical services specialist record a two-year compound annual growth rate (CAGR) in its net profit of 53.3% to RM22.5 million assuming the group opens three new clinics by the end of FY2023, followed by another five in FY2024, with each branch generating revenue of RM3.9 million on average.

"We believe the growth to be underpinned by higher demand of the aesthetic services while delivering [satisfying] results to customers," it said.

PIVB's valuation of DC Healthcare implies a 40% discount to Bursa's healthcare index's forward PE multiple of 26 times.

"We believe the discount is warranted given DC Healthcare's relatively small market capitalisation in the healthcare sector, in addition to the elective nature of its aesthetic services.

"Moving forward,  DC Healthcare plans to establish eight new aesthetic medical clinics in the next two years, mostly targeting the northern and southern region of West Malaysia.  

"[It] intends to remain focused on its aesthetic services by recruiting an additional six LCP physicians, 16 resident medical doctors, 56 clinic consultants and 16 administrative staff, with purchase of new medical machines and equipment for its existing and new aesthetic medical clinics," it said.

DC Healthcare aims to raise RM49.81 million from its IPO, which will entail the issuance of 199.26 million shares, representing 20% of its enlarged issued share capital.

Of the amount raised, RM17.01 million will be used as working capital, while RM6.24 million will be allocated towards repaying borrowings.

Meanwhile, it will set aside RM9.44 million to start eight new aesthetic clinics in Johor, Melaka, Negeri Sembilan, Pulau Pinang, Perak, and Kedah, with RM13.12 million to purchase medical machinery and equipment.

The group has a tentative listing date of July 17.

M&A Securities is the principal adviser, sponsor, underwriter and placement agent for the IPO.