DC Healthcare Holdings (DCH) recorded a 3-year (financial year 2019-2022) revenue and net profit compounded annual growth rate of 62% and 102% respectively, supported by improved average sales per clinic and increased gross profit margin in the aesthetic services segment across the years.
“DCH’s core net profit more than doubled year on year to RM9.6 million in financial year 2022, lifted by strong sales growth on the back of increased number of treatments served with the addition of 5 new clinics in the central region,” said CGSCIMB in the recent Retail Research Report.
Meanwhile, average selling price per treatment also rose to RM480 in financial year 2022. Gross profit margin climbed 1.5% points year on year to 56.2% in financial year 2022 as higher sales from the aesthetic services more than offset the increase in staff costs.
DCH has a net cash position of RM5 million as of 31 December 2022, and post IPO, it does not have a fixed dividend policy.
DCH plans to set up 8 new aesthetic medical clinics on top of its 13 existing branches as at 30 May 2023. The average timeframe for a new aesthetic medical clinic to be operational ranges from 6 to 9 months and the expansion plan is expected for completion by 2024.
“80% of financial year 2022 sales were contributed by aesthetic services package, where revenue is recognised upon delivery of the treatment within the contract period,” said CGSCIMB.
To note that, DCH registered contract liabilities worth RM2.9 million in financial year 2022, which is expected to be recognised progressively in the next financial year.
Other key competitive advantages are such as being an established brand and having 7 years of track record under the brand name of “Dr Chong Clinic” with zero legal proceedings incurred against the group to-date, and their services are supported by modern medical equipments.
DCH is set to ride on the increasing market size of local aesthetic medicine industry, which is projected to reach RM1 billion in 2027, according to Protégé Associates. The company has gained 11.1% of market share based on its financial year 2022 revenue.
“Key risks to the group include unfavourable regulatory requirements, availability of talents and failure of treatment which could lead to reputation risk,” said CGSCIMB.
DCH aims for listing on the Bursa Ace Market on 17th July 2023 with a target market capitalisation of RM249.1 million. The final day for initial public offering (IPO) application will be on 5th July 2023.
With the IPO, the group will raise total proceeds of RM49.8 million: RM17 million for working capital, RM13 million for purchase of new medical machines and equipment, RM9 million to set up new aesthetic medical clinics, RM6 million to repay borrowings, and RM4 million for listing expenses.
