LYC Healthcare mulls spinning off dental, aesthetic businesses for listing

LYC Healthcare Bhd, which is in the midst of spinning off its health-related treatment company as a result of a listing in Singapore, is now thinking about an additional spin-off listing — this time on Bursa Malaysia. According to team CEO and running director David Sui Diong Hoe, the team is hunting at a potential spin-off listing of its dental and aesthetic division within just the future a few years.

“For now, we are on the lookout at Bursa’s ACE Market. But if our division’s revenue is sizeable 3 a long time later, we will not low cost the chance of finding detailed in Hong Kong,” he tells The Edge in an job interview.

The team presently operates three dental clinics underneath the manufacturer name KL Dental in Puchong, Mont’Kiara and Subang. It also owns an aesthetic centre and a wellness centre in Bandar Sri Damansara, as perfectly as a beauty and magnificence clinic in Bangsar South.

“Currently, our total dental and aesthetic division is making a profit of close to RM1 million for every year. We are in the middle of negotiations to acquire another firm that is generating [an annual profit of] about RM1 million. We prepare to acquire a lot more worthwhile providers from which we can derive synergies in the upcoming several several years,” claims Sui.

He provides that LYC Healthcare’s dental and aesthetic firms share identical prospects. “Today, dental is not just about procedure, but also about improving upon the visual appeal of teeth. With our aesthetic and cosmetic centres, we can kill two birds with just one stone.”

The 66-year-previous was appointed to LYC Healthcare’s board in July 2016. He beforehand served as managing director of Ralco Corp Bhd and as non-government director of Timberwell Bhd.

Prior to the Covid-19 outbreak, LYC Health care experienced been concentrating on organic and natural progress, as it nurtured its health care and health care-associated companies, which bundled four confinement centres and a childcare centre.

But considering the fact that 2020, the team has begun to actively obtain new firms, including a 51% stake each and every in Singapore health-related companies T&T Medical Group Pte Ltd (T&T) and HC Orthopaedic Surgery Pte Ltd (HCOS), a 70% stake in Aqurate Components Intl (M) Sdn Bhd and a 21% strategic stake in ANOC Medicare & Diagnostic Centre.

LYC Healthcare is now attaining the remaining 49% shareholding in T&T and HCOS. These two corporations, collectively with Aqurate, will be grouped beneath LYC Medicare (Singapore) Pte Ltd, which will be utilised as the car to checklist on the Catalist board of the Singapore Trade (SGX).

Notably, LYC Healthcare experienced, concerning 2018 and 2022, allotted whole funds expenditure of RM170 million to increase organically and inorganically. As at Dec 31, 2021 (3QFY2022), the group’s internet gearing stood at 2.18 times.

LYC Healthcare mulls spinning off dental, aesthetic businesses for listing

“Today, we are no for a longer time just a confinement centre operator. Natural expansion will take time. For instance, when I obtain a organization that is creating a profit of RM1 million at a For each (selling price-earnings ratio) of eight moments, it will halve to four situations if I can double my earnings. That’s how quick we can increase by M&A (merger and acquisition) workout routines,” claims Sui.

“But for us to get started a new enterprise, to breakeven and then to make a RM1 million gain, it will probably acquire a longer time. That’s why we have been aggressively getting organizations in Malaysia and Singapore in excess of the earlier two several years.”

In a nutshell, he believes LYC Health care could unlock the expenditure worth of the firms it has been attaining by using the spin-off listing on SGX, followed by the second just one on Bursa.

On the listing of LYC Medicare SG, Sui suggests the group will be searching at a For each of 15 situations. At present, its group of providers is generating a gain of about S$6 million (RM19 million) and therefore, its believed market capitalisation would be about S$90 million. Put up-listing, LYC Healthcare will retain a stake of about 54% to 55% in LYC Medicare SG.

It has been six several years considering that lower-profile businessman Lim Yin Chow emerged as the main shareholder of Mexter Know-how Bhd, which was decline-producing at the time. Immediately after that, the group’s concentration — which was mostly on the provision of mother and childcare-linked services — expanded to incorporate the medical and healthcare-relevant business, even though its title was altered to LYC Healthcare in January 2019. But these expansions have still to aid the group return to financial gain.

According to its 2021 once-a-year report, the group — which reported a reduction after tax of RM2 million for the 15-month economical period of time finished March 31, 2017 (the expanded period was owing to a adjust in economical year stop from Dec 31) — observed its reduction following tax worsen from RM5.2 million in FY2018 to RM6 million in FY2019, RM10.3 million in FY2020 and RM11.8 million in FY2021.

At end-FY2021, LYC Health care had accrued losses of RM59.89 million at the group amount — from a decline of RM47.61 million at stop-FY2020 — and RM38.66 million at the firm degree. In June previous 12 months, its shareholders permitted a proposed capital reduction to cancel RM37.41 million of its issued share cash to offset its accrued losses from the corresponding rise of RM37.41 million in credit history.

Sui states LYC Healthcare’s recent acquisitions will enable accelerate its path to profitability as it rides the envisioned advancement in demand for health care-associated products and services, pushed by the ageing populations in Malaysia and Singapore.

“We are usually on the lookout for companies in the health care place that complement our existing businesses. We have been speaking to different corporations, but no definitive agreements have been signed. The sectors we are searching at are maternity hospitals, cosmetic and aesthetic centres, dental clinics, and wellbeing and wellness companies,” he claims.

With 14.4% fairness desire, Lim is the biggest shareholder of LYC Health care, adopted by substantial shareholders Kenanga Investors Bhd for BLM Holdings Sdn Bhd (9.09%) and Tee Chee Chiang (5.45%).

Past Thursday, the share rate of ACE Market-detailed LYC Health care had dropped just about 15% yr to date to shut at 23.5 sen, providing the group a current market capitalisation of RM120 million.