KUALA LUMPUR (June 18): Eye specialist group Optimax Holdings Bhd (KL:OPTIMAX) is expected to achieve record profits in 2025, as the ambulatory care centres (ACCs) in Atria Mall, Kota Kinabalu and Cambodia are expected to contribute to their first full-year profit, according to CGS International.

In a research note, the house said the anticipated growth is supported by strong demand for laser eye procedures such as Lasik and Presbyond, along with a growing number of patients opting for higher-value surgeries.

However, due to its intended investments in the financial year ending Dec 31, 2026 (FY2026), earnings growth could slow down in FY2026, but still allow Optimax to achieve FY24-27F core earnings per share (EPS) compounded annual growth rate (CAGR).

Therefore, the firm revised Optimax’s earnings forecasts downwards by 11.8% and 18.9% for FY2025 and FY2026, respectively, with core earnings per share expected to grow at a CAGR of 12% from FY2024 to FY2027.

The eye specialist group is ramping up investments, particularly for its upcoming operations in Kempas hospital in Johor and Selgate Hospital in Rawang — both under construction and slated to open next year.

These are expected to weigh on earnings in the form of higher staffing and depreciation costs, slowing core net profit growth to 4.6% in FY2026, before rebounding by 11% in FY2027.

Additionally, Optimax is also eyeing regional expansion into other parts of the region, with plans likely to be finalised at the end of the year.

“Optimax is also planning for further regional expansion in Indonesia and Vietnam, building on the success in its maiden venture to Cambodia as it sees demand rising in these countries,” said analysts.

Although CGS International reiterated its “add” call to its shares, it lowered the company's target price (TP) to 81 sen. The upside to its call is due to an expected 19% earnings growth in FY2025 driven by contributions from its three new ACCs and new hospital expansions.

There are currently five research houses on Optimax’s shares, all with “buy” recommendations, according to Bloomberg. The 12-month average target price stands at 76 sen.

Optimax’s share price has dropped 25% over the past year due to weaker-than-expected earnings, but now trades at 15.8 times FY2025 price-to-earnings. CGS International noted that investor sentiment could improve as earnings begin to pick up.