{"id":489883,"date":"2026-02-19T10:03:09","date_gmt":"2026-02-19T10:03:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/489883\/"},"modified":"2026-02-19T10:03:09","modified_gmt":"2026-02-19T10:03:09","slug":"rhb-starts-coverage-of-lac-med-calls-it-proxy-for-malaysias-healthcare-modernisation","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/489883\/","title":{"rendered":"RHB starts coverage of LAC Med, calls it proxy for Malaysia\u2019s healthcare modernisation"},"content":{"rendered":"

KUALA LUMPUR (Feb 19): RHB Small Cap Asean Research sees LAC Med Bhd (KL:LACMED<\/a>) as a play on Malaysia\u2019s healthcare modernisation, assigning an 13% upside in its initiation report on the company which was listed on the Main Market of Bursa Malaysia in December 2025.\u00a0<\/p>\n

The company, Malaysia\u2019s largest third-party\u00a0medical equipment distributor, is expected to grow due to hospital bed shortages, rising non-communicable diseases, ageing population, and its planned expansion into Indonesia.<\/p>\n

RHB said LAC Med stands out with a strong 21-year track record and long-term relationships, giving it a competitive edge.\u00a0<\/p>\n

\u201cWe believe LAC\u2019s established footprint creates a high barrier to entry for competitors,\u201d it said. LAC Med is present in 58% of Malaysian hospitals, or 217 facilities, and 832 clinics.<\/p>\n

Reliability is key in the medical equipment sector, as products last eight to 12 years and require consistent long-term support. Distribution agreements are often short-term, with principals able to terminate underperforming partners, making execution credibility essential.<\/p>\n

\"\"<\/a><\/p>\n

In 2025, LAC Med added five new principals, including Abbott and Baxter, while managing its product offerings to avoid internal competition and enhance cross-selling opportunities.<\/p>\n

As of 2023, Malaysia\u2019s private healthcare sector had about 18,800 beds, expected to rise to 22,800 beds by 2028, a 4% compound\u00a0annual growth rate (CAGR) based on expansion plans by IHH Healthcare Bhd (KL:IHH<\/a>), KPJ Healthcare Bhd (KL:KPJ<\/a>), and Sunway Healthcare Holdings Bhd. This growth will boost demand for medical equipment, diagnostics, and healthcare technology, benefiting distributors like LAC Med.<\/p>\n

The public healthcare sector is also expanding, with a 7.8% CAGR in budget from 2021-2026. Malaysia\u2019s healthcare spending remains below the OECD average, indicating room for growth.<\/p>\n

Beyond domestic borders, the company is allocating RM8 mil of its initial public offering\u00a0proceeds to scale its Indonesian operations. While currently focused on a single principal, Alpinion, the segment is expected to contribute meaningfully to revenue by the financial year ending Dec 31, 2026 (FY2026)-FY2027, as it taps into a market nearly eight times larger than Malaysia.<\/p>\n

RHB expects LAC Med to grow at a three-year core earnings CAGR of 18.2% through FY2027.\u00a0<\/p>\n

The company is valued at a 15.7 times two-year forward price-earnings ratio, in line with global peers, implying a 34% premium over local peer UMedic Group Bhd (KL:UMC<\/a>).\u00a0<\/p>\n

The premium is justified for several reasons. First, LAC Med distributes established global brands like Philips and Samsung, which carry lower product and commercial risk compared to UMedic\u2019s own-brand model. Second, LAC Med has a larger earnings base and stronger three-year earnings growth of 18.2%, compared to UMedic\u2019s 13.6%. Third, LAC Med can undertake technically complex projects, such as radioactive-related \u00a0projects via its Atomic Energy Licensing Board (AELB) licence, which creates higher barriers to entry and supports more defensible earnings.\u00a0<\/p>\n

For FY2026, RHB forecasts a recurring net profit of RM29 million on RM288 million in turnover, backed by a robust order book of RM195.1 million, with RM128.4 million tied to complex supply and integration projects.<\/p>\n

LAC Med is Malaysia\u2019s largest authorised distributor of Philips medical equipment, with a de facto exclusive position due to Philips\u2019 single-channel distribution model. While risks include regulatory changes, reliance on Philips (63% of purchases in FY2024) and potential project delays.\u00a0<\/p>\n

LAC Med\u2019s shares were up 4.66%\u00a0to RM1.01 a share at the midday break on Thursday, valuing the company at RM401.9 million.\u00a0<\/p>\n

Read also:

\nLAC Med sees marginal gain on Main Market debut<\/a>

\nLAC Med targets Indonesia as key growth market with higher profit margins<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"KUALA LUMPUR (Feb 19): RHB Small Cap Asean Research sees LAC Med Bhd (KL:LACMED) as a play on…\n","protected":false},"author":2,"featured_media":489884,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[64,63,137,500],"class_list":{"0":"post-489883","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-healthcare","8":"tag-au","9":"tag-australia","10":"tag-health","11":"tag-healthcare"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/489883","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=489883"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/489883\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/489884"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=489883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=489883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=489883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}