Growth the best medicine

OVER the past two decades, LAC Med Bhd, which supplies and integrates medical devices, has built a strong foundation with more than 300 active customers.

Now, the group is thinking bigger. The next phase of strategy is to scale its existing business and build higher earnings visibility, says group chief executive officer Liew Yoon Poh.

With over 2,600 installed medical devices as well as established global principal relationships, he remains confident in the group’s growth trajectory.

“We are focused on executing strategies that will drive sustainable growth,” he tells StarBiz7.

Liew says the company is expanding beyond equipment sales into recurring and repeatable revenue streams across consumables, maintenance and lifecycle services, digital solutions and artificial intelligence (AI), while continuing to broaden its medical technology portfolio.

“At the same time, Indonesia provides us with a new growth frontier to progressively replicate the capabilities we have built in Malaysia,” he adds.

LAC Med’s order book stood at RM246.9mil as at July 31, while its tender book reached approximately RM769.8mil.

“More importantly, we are increasingly focused on improving the quality and visibility of our revenue.

“A good example is our RM105mil consumables and related products contract, which extends over four years,” Liew says.

He notes that while equipment projects typically have shorter revenue cycles, consumables, maintenance, managed services and other recurring or repeatable businesses can provide multi-year visibility.

“Strategically, our goal is clear, that is to complement our project-based business with a larger base of recurring and repeatable revenue,” Liew adds.

Meanwhile, he says that thus far, the company’s operations in Malaysia and Indonesia have remained largely uninterrupted despite the global effects of war.

Nevertheless, as an integrator of international medical technologies, the company is naturally exposed to global supply chains.

“Geopolitical tensions can potentially affect shipping routes, logistics costs, component availability and delivery lead times, so we maintain close communication with our principals and monitor delivery schedules and supply-chain developments closely.”

Liew points out that one advantage of having relationships with multiple global principals and a broad portfolio is that “we are not dependent on a single product category or supplier”.

“Our priority is ultimately to ensure continuity for our healthcare customers because medical technology is mission- critical.

“When a hospital requires equipment, consumables or technical support, reliability of supply and service becomes extremely important.” Liew adds.

One of LAC Med’s key challenges is ironically its biggest opportunity – execution.

“We have expanded our portfolio significantly, built a strong customer base and established our first regional platform in Indonesia.

“The next phase is about converting these investments into sustainable growth – commercialising new technologies, scaling Indonesia and building the talent required for an increasingly digital and AI-enabled healthcare industry.”

Liew adds that the “measure of success is not how many machines we sell”.

“It is how much long-term value we can create from every customer relationship we build.

“That means more consumables, services, digital solutions and AI around our installed base, deeper partnerships with healthcare providers, and eventually bringing that model into new markets,” Liew says.

For the six months to June 30 (1H26), the company made a net profit of RM6.3mil compared to a net profit of RM10.1mil for the same period a year ago.

Revenue for the six-month period stood at RM75mil against a revenue of RM95mil for the same period a year earlier.

RHB Research, which kept a “buy” call and target price of RM1.16 on the stock, says the company’s first-half 2026 (1H26) results were broadly in line, but a strong outstanding order book, rising recurring income, and a RM769.8mil tender book should underpin a stronger 2H26 and earnings growth into 2027. At last look, the stock was trading at 78 sen apiece.

“We see further contract wins and new principal onboarding as key catalysts, reinforcing LAC Med’s position as a beneficiary of Malaysia’s structural healthcare expansion.”

RHB Research says it leaves its earnings forecasts unchanged as results were within expectations.

“Indonesia is now expected to break even in 1H27 (from an earlier financial year ending 2026 or FY26) with the 1H26 loss of about RM1mil driven by weaker public healthcare spending as funding is diverted to (Indonesia’s) Free Nutritious Meal programme.”

RHB Research notes that LAC Med’s outstanding order book has hit a record at current levels, with management targeting more than 60% recognition in 2H26, providing solid earnings visibility.

It adds that the group has flagged RM40mil to RM50mil of billings at risk of slipping a quarter due to client-side regulatory approvals and renovation delays.

“These are timing-related, with billings potentially pushed into 1Q27.”

The research house says, given that 4Q26 earnings account for about 50% of its FY26 estimate, this remains the principal risk to the near-term earnings profile of LAC Med.