Bold claim: LAC Med is a doorway to Malaysia’s healthcare modernization, and its stock could ride that trend higher. But here’s where it gets controversial: the company’s future hinges on how smoothly it can scale beyond domestic borders while maintaining reliability in a high-stakes field.
RHB Small Cap ASEAN Research views LAC Med Bhd (KL:LACMED) as a leveraged play on Malaysia’s healthcare modernization, assigning an initial upside of about 13% in its initiation note. LAC Med, which joined Bursa Malaysia’s Main Market in December 2025, is Malaysia’s largest third-party medical equipment distributor, and its growth prospects are framed by hospital bed shortages, rising non-communicable diseases, an aging population, and a planned expansion into Indonesia.
RHB emphasizes that LAC Med’s strength lies in its long track record—21 years—and its established relationships, which the firm believes create a meaningful barrier to entry for potential competitors. According to RHB, LAC Med already operates in 58% of Malaysian hospitals (217 facilities) and runs 832 clinics, underscoring its broad footprint.
Reliability is critical in the medical equipment sector because many products have lifespans of eight to 12 years and require ongoing, long-term support. Distribution agreements can be relatively short-term, with principals able to terminate underperforming partners, so execution credibility and consistent service become essential competitive advantages.
In 2025, LAC Med expanded its principal lineup by adding five new partners, including Abbott and Baxter, while carefully managing its portfolio to minimize internal competition and maximize cross-selling opportunities.
Industry context shows private healthcare capacity in Malaysia was around 18,800 beds in 2023 and is projected to reach about 22,800 by 2028, a 4% CAGR guided by expansion plans from major players such as IHH Healthcare Bhd, KPJ Healthcare Bhd, and Sunway Healthcare Holdings Bhd. This anticipated growth is expected to lift demand for medical equipment, diagnostics, and healthcare technology, benefiting distributors like LAC Med.
Public healthcare spending is also growing, with an estimated 7.8% CAGR in the 2021–2026 window. Despite this expansion, Malaysia’s healthcare expenditure remains below the OECD average, suggesting room for continued growth and investment.
Beyond Malaysia, LAC Med is deploying RM8 million of its initial public offering proceeds to scale its Indonesian operations. While the current focus is on a single principal, Alpinion, the Indonesian segment is anticipated to contribute meaningfully to revenue in FY2026–FY2027 as it taps into a market roughly eight times larger than Malaysia’s.
RHB projects LAC Med to achieve an 18.2% three-year core earnings compound annual growth rate (CAGR) through FY2027, reflecting ongoing execution and strategic scale-up.
Valuation-wise, LAC Med is priced at about 15.7 times its two-year forward price-earnings ratio, aligning with global peers and implying roughly a 34% premium over local competitor UMedic Group Bhd. The premium is argued to be justified by several factors: LAC Med distributes well-established global brands like Philips and Samsung, which reduces product and commercial risk relative to UMedic’s own-brand approach; it benefits from a larger and more resilient earnings base with three-year earnings growth at 18.2% versus UMedic’s 13.6%; and it possesses the capability to undertake technically complex projects, including radioactive-related initiatives under an Atomic Energy Licensing Board (AELB) licence, which raises entry barriers and supports defensible earnings.
For FY2026, RHB forecasts a recurring net profit of RM29 million on RM288 million in turnover, underpinned by a solid order book of RM195.1 million, with RM128.4 million tied to complex supply and integration projects.
LAC Med holds Malaysia’s position as the largest authorised distributor of Philips medical equipment, effectively enjoying an exclusive-like status due to Philips’ single-channel distribution model. Risk factors highlighted include potential regulatory changes, reliance on Philips (which accounted for 63% of purchases in FY2024), and the possibility of project delays.
As of midday trading on Thursday, LAC Med’s shares were up 4.66% to RM1.01, valuing the company at approximately RM401.9 million.
