KUALA LUMPUR (Oct 28): Alpha IVF Group Bhd (KL:ALPHA), a fertility care specialist, has not ruled out potential mergers and acquisitions (M&As) as part of its future growth strategy, should the right opportunities arise, said group managing director Datuk Dr Colin Lee Soon Soo.
But for now, the group is focused on organic expansion, with plans to establish two new in vitro fertilisation (IVF) centres — one in Sabah and another in Manila, the Philippines. Both are targeted to begin operations by end-May 2026.
“M&A is definitely not something we will overlook,” Lee told reporters after the group’s annual general meeting on Tuesday.
“For an IVF group, growth through M&A is easier, as setting up new centres is more challenging. But the margins and final bottom line you get from building new centres are better, compared with from M&As.
“When we establish new centres, we build them according to our standards, leveraging our operational strengths and efficiency to deliver the results we’re known for. Setting up new centres is something not many groups can do, but it's something Alpha IVF does very well,” he added.
Lee is the group’s largest shareholder, holding a direct 35.11% stake and an indirect 9.3%.
Alpha IVF currently operates three IVF centres in Malaysia — located in Kuala Lumpur and in Penang — and one in Singapore, alongside two sales offices in China and a satellite clinic in Indonesia.
For its first quarter ended Aug 31, 2025 (1QFY2026), the group's net profit rose 6.3% year-on-year to RM15.28 million from RM14.38 million, as revenue climbed 21.2% to RM52.1 million on stronger sales and improved margins. The group reported a gross profit margin of 60.4% and a net margin of 29.3% for the quarter.
On the sustainability of these high margins, corporate adviser Datuk Amos Siew said the “group’s gross profit margin may ease slightly due to startup costs from its new IVF centres”.
“We are opening new centres. Even though we are confident they will perform well, we cannot predict exactly how efficient they will be at the start because they’re new. There will be startup costs that may pull margins down a bit, but we are not alarmed.
“Margins can decline slightly, but the key is that our absolute net profit continues to increase," he said.
Overall, Siew said the group expects its topline to expand further, supported by the medical tourism boom across Southeast Asia and rising demand for assisted reproductive services. This demand is driven by factors such as declining global sperm counts and a growing number of women choosing to start families later in life.
Main Market transfer
Meanwhile, the group is planning to transfer its listing to the Main Market by early next year.
Alpha IVF said it has, under the accelerated transfer process framework, met the Securities Commission Malaysia’s requirements, including maintaining a daily market capitalisation of above RM1 billion over the past six months.
Alpha IVF’s share price slipped half a sen or 1.47% to close at 33.5 sen on Tuesday, valuing the ACE Market-listed group at RM1.63 billion. The stock was listed at 32 sen apiece in March last year.
“We’ve spoken to our merchant banker, and will likely make the move by early next year,” Siew said.
As at Aug 31, 2025, the group’s shareholders’ equity stood at RM188.69 million. It held RM30.14 million in cash and bank balances, RM4.05 million in fixed deposits, and RM106.21 million in short-term investments, with no borrowings.
Total assets amounted to RM166.02 million against RM55.25 million in total liabilities.