IN the healthcare sector, attention typically centres on the heavyweights, namely the private hospitals and pharmaceutical groups. Yet, smaller players in the eye care segment are quietly gaining ground.
Rising screen time, an ageing population and lifestyle-related eye issues are spurring demand for optical services and medical eye care. In response, companies such as Focus Point Holdings Bhd, Optimax Holdings Bhd, and Topvision Eye Specialist Bhd – the three listed players in Malaysia’s eye care segment – are scaling up and expanding into underserved areas to position for long-term growth.
Specifically, Optimax and Topvision operate primarily as clinical eye care providers, offering services such as cataract surgeries, laser vision correction, and specialised treatments through a network of ambulatory care centres (ACCs).
Focus Point, meanwhile, runs a retail-driven optical chain, with a wide network of outlets providing eyewear and basic eye exams.
For the 2024 to 2028 period, Malaysia’s medical eye care industry is projected to grow at a compound annual growth rate (CAGR) of 10%, rising from RM849.5mil to RM1.25bil, according to Malacca Securities which cites data from boutique research company Protege Associates.
In 2023, the industry size reached RM775.8mil, up from RM542.8mil in 2021.
Notably, cataract surgeries, often resulting from ageing, diabetes or excessive exposure to UV rays from smartphones, have seen an increase in the number of registered procedures in recent years. This procedure now accounts for around 40% of all surgeries performed within the country’s ophthalmology sector, making it the most in-demand intervention.
Building on this trend, the research firm forecasts Topvision’s earnings to grow at an 11.7% CAGR over the next three years, with core profits after tax of RM5.2mil, RM5.6mil and RM6.6mil, respectively.
Topvision, which is the smallest of the three players in terms of market capitalisation, operates 11 ACCs across Malaysia, offering services ranging from general eye care to advanced vitreoretinal surgeries.
Recently upgraded to the ACE Market, the company is embarking on an expansion that includes opening new ACCs and tapping into medical tourism opportunities with a focus on Indonesia.
Currently, local patients contribute the bulk of its earnings.
The stock was previously listed on the LEAP Market from 2018 until its initial public offering (IPO) on the ACE Market in December 2024.
Specifically, Topvision will utilise RM7.9mil out of the RM18mil proceeds raised to set up a multidisciplinary specialist tertiary eye ACC in Petaling Jaya, targeting both local and international patients. Two ACCs are also in the pipeline for Kuala Terengganu, Terengganu, and Tawau, Sabah, strengthening the company’s reach into regions where eye care services have traditionally been limited.
While its balance sheet has improved with a net cash position of RM16.4mil post-IPO, Topvision’s valuation at 36.7 times price-to-earnings (PE) multiple is relatively high, reflecting its share price surge following the debut.
In comparison, Optimax’s current PE stands at about 20.53 times, while Focus Point trades at a lower 10.48 times PE, according to Bloomberg data.
According to an analyst, Focus Point’s lower valuation likely reflects its hybrid healthcare-retail business model, which is more exposed to consumer discretionary spending. In comparison, clinical service providers often command higher valuation multiples, as surgeries typically offer stronger profit margins.
This is reflected in the Bursa Malaysia Healthcare Index, which has historically traded at a higher PE range of 37.9 to 41.4 times, as the sector’s earnings are generally viewed as defensive yet attractive to investors.
Back to operations, Optimax, which specialises in cataract and refractive surgeries, is likely to post record profits in the financial year 2025 (FY25) as three of its newly established ACCs begin contributing full-year earnings.
The ACCs are located at Atria Mall (Petaling Jaya, Selangor), Kota Kinabalu (Sabah) and Cambodia. Optimax had made substantial investments for these in FY23.
In a report last month, CGS International (CGSI) Research expects FY25 profits to grow close to one-fifth year-on-year (y-o-y). It recorded a net profit of RM13mil in FY24 and has a healthy cash position, too.
Following its maiden venture in Cambodia, Optimax is targeting expansion into the Indonesian and Vietnamese markets. While investments on this front may slow earnings growth in FY26, CGSI Research still expects the company to achieve a core earnings per share growth rate of 12% from FY24 to FY27.
However, there are challenges. Malaysia’s newly introduced sales and service tax on international patients may slightly erode Malaysia’s cost advantage in medical tourism.
This could lead companies to recalibrating their pricing strategies and offering more differentiated services as they expand this segment, analysts say.
Unlike Focus Point, the two medical eye providers currently lack funds following, likely due to their smaller market caps and niche clinical business models.
As for Focus Point, government-linked Perbadanan Nasional Bhd holds 8.44% in the stock, while Lembaga Tabung Haji has 3.76%.
At the time of writing, the stock was trading at 73 sen, down some 8% year-to-date.
All five analysts covering the stock have a ‘Buy’ rating with a consensus 12-month target price of RM1.06.
In FY25, Focus Point plans to open 10 new stores, including one each in underserved East Malaysian locations such as Karamunsing, Bintulu and Miri. This is more than double the four outlets opened in FY24.
As of the first quarter of 2025 (1Q25), Focus Point has a total of 202 stores, following the opening of three new outlets. Its corporate segment is charting strong growth, up 73% y-o-y in 1Q25.
One regulatory shift working in its favour is the recent ban on online sales of optical devices and contact lenses. This could redirect demand to brick-and-mortar channels, auguring well for companies like Focus Point.
Currently, the company derives around 18% of its optical segment revenue from contact lenses, a figure that could rise as more consumers return to physical stores in light of the online sales ban.
Focus Point is also in the food and beverage business through its Japanese bakery chain, Komugi. However, this is still a relatively small contributor to earnings.