DC HEALTHCARE HOLDINGS BERHAD

Is DC Healthcare on the Path to Recovery?

First of All, Share Price Performance

As the broader Malaysian market faces selling pressure, $DCHCARE / 0283 (DC HEALTHCARE HOLDINGS BERHAD) is no exception.

The company has experienced similar challenges, reflected in its recent share price movements.

However, despite the market's overall downturn, the fundamentals of DCHCARE show signs of improvement compared to the previous quarter.

For Q2 FY2024, DCHCARE reported a revenue of RM13.9 million, down from RM17.9 million in the previous quarter.

This decline is primarily attributed to a lower redemption rate for aesthetic services.

It's worth noting that DCHCARE has shifted its business model from charging customers as services are rendered to collecting upfront payments, particularly for bundled services.

A closer examination reveals that contract liabilities—representing outstanding services yet to be redeemed by clients—have increased to RM13.7 million this quarter.

This indicates a strong pipeline of future services, providing a buffer against short-term revenue fluctuations.

Despite the positive revenue outlook, DCHCARE reported a Loss Before Tax (LBT) of RM6.7 million for the quarter.

This loss was driven largely by higher administrative expenses, which rose to RM9.5 million.

The increase in costs includes RM1.6 million in additional marketing expenses, RM1.9 million in operational and maintenance costs, RM1.1 million in depreciation of rental outlets, and RM1.4 million in professional fees related to corporate exercises.

On a brighter note, the company’s losses have narrowed by approximately 15.15% compared to Q1 FY2024, thanks to a substantial revenue growth of 46.83%.

Some may view the numbers with concern, but it’s essential to recognize the company’s aggressive expansion strategy. DCHCARE now operates 21 outlets, nearly doubling from 12 outlets in Q2 FY2023. This expansion highlights the company’s commitment to growth and its ability to scale its operations.

Additionally, under its subsidiary Ten Doctors Sdn. Bhd., DCHCARE is launching a new brand, NewB, which focuses on premium ageless and hydration beauty products. This strategic move could be a game-changer, given the expanded sales channels now available to the company.


Conclusion

In conclusion, while the recent decline in share price may cause concern among investors, DCHCARE's underlying business fundamentals remain strong. The company's strategic expansions and revenue growth suggest that it is well-positioned for future success. At its current discounted price, DCHCARE may present a compelling buying opportunity for investors who believe in its long-term potential.


Disclaimer

The information provided in this article is for educational and informational purposes only and should not be considered financial advice. Investing in stocks involves risks, including the loss of principal. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. The author holds no responsibility for any investment decisions made based on the information provided.

$DCHCARE / 0283 (DC HEALTHCARE HOLDINGS BERHAD)
A year ago, DCHCARE went IPO at 25sen. Now, it dropped lower than IPO price at 22.5sen now.

Its 3 recentmost quarter reports have not been good, churning net losses, spooking investors.

A year ago, I said wait for this stock to go lower. Now, I think not even 15sen can attract me.

General Meetings: Outcome of Meeting

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DC HEALTHCARE GROUP SDN. BERHAD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DR CHONG TZE SHENG

Changes in Director's Interest (Section 219 of CA 2016) - DR CHONG TZE SHENG

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DR LAI NGAN CHEE

Changes in Director's Interest (Section 219 of CA 2016) - DR LAI NGAN CHEE

The Truth Behind DC Healthcare Results!!

What’s Going On?

Investors are buzzing over the significant loss reported by $DCHCARE / 0283 (DC HEALTHCARE HOLDINGS BERHAD) this quarter. What caused such a drastic dip in both revenue and profit before tax for DCHCARE?

Diving Deeper into Results

DCHCARE's revenue dropped from RM16.8 million in Q1 FY2023 to RM9.5 million in Q1 FY2024. Along with this, the gross profit plummeted from RM9.8 million to RM1.2 million, resulting in a net loss of RM7.9 million for the company.

Typically, investors only focus on the profit and loss statement to assess financial health. However, in DCHCARE’s case, it's crucial to examine their statement of financial position as well.

While there is a decrease in the revenue of the company, the contract liabilities of the company had increased significantly from RM9.6 million from RM3.7 million.

Now, what are contract liabilities?

Despite the revenue decline, the company’s contract liabilities increased significantly from RM3.7 million to RM9.6 million. What are contract liabilities? Essentially, DCHCARE collects deposits from clients for the next 12 months' aesthetic services, an increase from the initial 3 months.

This strategy significantly enhances cash flow as the company collects money upfront, but costs are only accounted for upon service redemption. Under Malaysia Financial Reporting Standards (MFRS), revenue can only be recognized when clients redeem their services. So, even if DCHCARE has cash on hand, it’s not considered revenue yet.

For those familiar with aesthetic services, refunds are typically not provided, and deposits expire if not used within 12 months. Reverse calculations suggest that actual revenue this quarter should be RM15.4 million (RM9.5 million + RM5.9 million).

But what about profits?

This quarter, three additional outlets were established compared to the previous quarter. According to DCHCARE’s prospectus, each aesthetic clinic costs RM1.0 million to RM1.5 million to establish, while slimming centers cost RM0.7 million to RM0.8 million.

Thus, the quarter appears lumpy as significant costs were incurred, but MFRS rules prevent recognizing deposits as revenue until services are rendered.

Conclusion

We see this as a major mispricing by the market due to misunderstanding the revenue recognition of DCHCARE. Aesthetic services are a long-term profitable venture, and the company has ample cash for further expansion.

This is definitely a good chance to invest in DCHCARE now!

Disclaimer

The information provided in this article is for educational and informational purposes only and should not be considered financial advice. Investing in stocks involves risks, including the loss of principal. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. The author holds no responsibility for any investment decisions made based on the information provided.

KUALA LUMPUR: DC Healthcare Holdings Bhd registered a net loss of RM7.91 million for the first quarter ended March 31, 2024 (1Q24) compared to a net profit of RM2.36 million a year ago. 

© New Straits Times Press (M) Bhd

KUALA LUMPUR: DC Healthcare Holdings Bhd remains optimistic about its prospects, supported by competitive strengths that are poised to foster sustainable growth in a dynamic market.

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

KUALA LUMPUR: Aesthetic medical services provider DC Healthcare Holdings Bhd plans to expand its business to Sabah and Sarawak by the end of this year.

© New Straits Times Press (M) Bhd

MULTIPLE PROPOSALSDC HEALTHCARE HOLDINGS BERHAD ("DC HEALTHCARE" OR THE "COMPANY")

(I) PROPOSED BONUS ISSUE OF WARRANTS;
(II) PROPOSED ACQUISITION;
(III) PROPOSED VARIATION; AND
(IV) PROPOSED ESOS

(COLLECTIVELY, THE "PROPOSALS")

Annual Report & CG Report - 2023

General Meetings: Notice of Meeting

KUALA LUMPUR: DC Healthcare Holdings Bhd opened new Dr. Chong Clinic and DC Body locations in KL Publika Shopping Gallery, and DC Body in Johor Bahru Bukit Indah, expanding its presence nationwide.

OTHERSDC HEALTHCARE HOLDINGS BERHAD ("DC HEALTHCARE" OR "THE COMPANY")
- PRESS RELEASE : DC HEALTHCARE RIDES THE WAVE OF SUCCESS WITH NEW OPENINGS AT PUBLIKA AND BUKIT INDAH

KUALA LUMPUR: DC Healthcare Holdings Bhd has opened its latest DC Body outlet in USJ Taipan.

OTHERSDC HEALTHCARE HOLDINGS BERHAD ("DC HEALTHCARE" OR "THE COMPANY")
- PRESS RELEASE : DC HEALTHCARE CONTINUES GROWTH MOMENTUM WITH SECOND DC BODY OUTLET OPENING IN USJ TAIPAN

Change of Address

MULTIPLE PROPOSALSDC HEALTHCARE HOLDINGS BERHAD ("DC HEALTHCARE" OR THE "COMPANY")

(I) PROPOSED BONUS ISSUE OF WARRANTS;
(II) PROPOSED ACQUISITION;
(III) PROPOSED VARIATION; AND
(IV) PROPOSED ESOS

(COLLECTIVELY, THE "PROPOSALS")

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DR LAI NGAN CHEE

Changes in Director's Interest (Section 219 of CA 2016) - DR LAI NGAN CHEE

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DR CHONG TZE SHENG

Changes in Director's Interest (Section 219 of CA 2016) - DR CHONG TZE SHENG

OTHERSDC HEALTHCARE HOLDINGS BERHAD ("DC HEALTHCARE" OR "THE COMPANY")
- PRESS RELEASE : DC HEALTHCARE FURTHER EXPANDS INTO PERAI, PULAU PINANG WITH TWO NEW OUTLETS, AND INTRODUCES DC BODY

KUALA LUMPUR: DC Healthcare Holdings Bhd is committed to continuous growth, with a focus on outlet expansion, including the recently operational branches in Ipoh and Taman Molek, Johor Bahru, according to managing director Dr. Chong Tze Sheng.