ALPHA: Strategic Expansions and Strong Organic Growth Drive Positive Outlook

TA SECURITIES has reiterated its “Buy” recommendation and maintained an unchanged target price of RM0.42 per share for Alpha IVF Group, citing robust earnings prospects underpinned by sustained organic growth and strategic expansion initiatives. The investment bank’s confidence is supported by the group’s ongoing operational successes and a clear pipeline for future development, with earnings forecasts for FY26-28 remaining unchanged.

Key Growth Drivers

The positive outlook is largely driven by strong organic growth across Alpha IVF Group’s four existing IVF specialist centres. Significant contributions are anticipated from upcoming centres in Sabah, Johor, Indonesia, and the Philippines, which are poised to serve as key catalysts for future growth. A notable success includes the group’s latest Alhaya IVF centre, which achieved profitability within its inaugural month of operation.

Locally, Alpha IVF Group is on track to launch two new IVF centres: one in Sabah, expected to commence operations in November 2025, and another in Johor, strategically located near JBCC Komtar, slated for a May 2026 opening, offering seamless access for Singaporean patients. The Johor facility is also set to introduce in-house laparoscopic gynaecology surgeries and drugs, tapping into a lucrative new revenue stream due to the significant cost differentials compared to Singapore.

Regionally, the group is expanding its footprint with Alpha Manila and Alpha Tuguegarao in the Philippines scheduled to begin operations in November 2025 and August 2026, respectively. Alpha is actively pursuing investment promotion incentives and tax relief in the Philippines. In Indonesia, Alpha Bali is expected to be operational by early-2027, poised to generate strong volumes, particularly given Bali’s new International Hospital. Alpha Jakarta is also projected to open next year, solidifying the group’s presence in Indonesia.

Furthermore, contributions from Chinese patients to Alpha’s Malaysian operations surged to RM12.6 million in 1QFY26, with sales representative offices in Shanghai and Guangzhou proving highly effective in patient channeling.

Addressing Challenges and Investment

While Alpha Singapore experienced a notable sales decline of 48.5% year-on-year to RM3.9 million in 1QFY26, primarily due to the departure of a key doctor, signs of recovery are now emerging. Sales grew 11.3% quarter-on-quarter following the addition of three new fertility specialists, and a gradual recovery is anticipated as these specialists establish their client base.

In a strategic move, Alpha recently increased its stake in Alhaya by acquiring an additional 33% for RM5.8 million, elevating its ownership to 87.1%. This acquisition is viewed positively, with the price implying a compelling FY25 P/E of 9.2x. TA SECURITIES anticipates Alhaya’s profit to grow strongly in FY26 and FY27, further bolstering Alpha IVF Group’s overall earnings projections.

Valuation and Recommendation

TA SECURITIES maintains its earnings forecasts for FY26-28, reaffirming its “Buy” recommendation with an unchanged target price of RM0.42 per share. This valuation is based on a PE multiple of 23.0x CY27 EPS. The group’s proactive strategic expansions, demonstrated operational efficiencies, and strong underlying growth drivers collectively position it for continued robust performance and sustained positive shareholder returns.