Tradeview Research has initiated coverage on LAC Med Bhd (LACMed) with a BUY recommendation and target price of RM1.26, implying 63.6% capital upside alongside a forecast FY27 dividend yield of 3.6%.
The research house favours the medical equipment distributor and systems integrator for its long-standing relationships with global principals, expanding brand portfolio and recurring revenue potential, as well as what it considers an undemanding valuation relative to its closest listed peer.
LACMed has served as the de facto exclusive distributor for selected Philips and Samsung product categories since 2017 and 2013, respectively, supported by its turnkey capabilities and nationwide technical support network.
Tradeview said the company’s established installed base creates customer stickiness and supports repeat equipment purchases, maintenance revenue and replacement demand over a typical product lifecycle of about 10 years.
Revenue visibility is further supported by an outstanding order book of RM246.9 million as at July 2026, alongside a RM769.8 million tender book and historical tender success rate of between 25% and 30%.
Against this backdrop, Tradeview forecasts LACMed’s revenue to grow between 22% and 38% over FY26 to FY28, supported by deeper penetration of Malaysia’s hospital market and expansion of its principal portfolio.
New Principals Open RM700 Million Market
LACMed has added nine new global principals since FY23, opening up an estimated RM700 million addressable market, based on management guidance.
Five principals secured in FY25 are expected to make a more significant revenue contribution from FY27 after their typical six-to-12-month incubation periods.
Tradeview said the broader portfolio also creates opportunities for LACMed to cross-sell equipment, consumables, maintenance services, medical equipment asset management services and software.
This is expected to support management’s ambition of increasing recurring revenue to about 40% of group revenue by around FY30, from 12% in FY25.
A higher recurring revenue contribution should reduce the lumpiness associated with project-based sales, improve earnings visibility and support margin expansion. Tradeview forecasts LACMed’s gross profit margin to rise from 25.7% in FY26 to 27.4% in FY28.
Valuation Seen Pricing In Near-Term Risks
Tradeview’s RM1.26 target price is based on 13.5 times FY27 forecast earnings, benchmarked against Umedic Group Bhd’s three-year average forward price-to-earnings multiple at one standard deviation below the mean.
The research house considers Umedic the closest listed comparison because both companies distribute medical equipment domestically and are exposed to hospital procurement cycles, healthcare spending and significant US dollar-denominated costs.
Tradeview said LACMed’s share price was trading close to its RM0.75 IPO price and about 43% below its RM1.34 record high, suggesting that several downside risks have largely been priced in.
These include the possibility of an earnings miss following weaker-than-expected 1QFY26 and 1HFY26 results, as well as potential delays in government project awards and revenue recognition should Malaysia hold an early general election in late 2026 or early 2027.
Tradeview said a higher valuation multiple would be warranted only if investors rotate towards defensive healthcare stocks in a broader risk-off environment.
Overall, the research house believes LACMed’s established principal relationships, growing order and tender pipelines, expansion into recurring revenue streams and relatively inexpensive valuation provide the foundation for its BUY recommendation.
