Aoxin Q&M Dental Group

[LenaHuat]

A sell-down yesterday because investors fear dilution. 18 partners, who own 70%, agreed not to cash out of the company without approval for the next 10 years. I'm not familiar with small tickers, is a free float of 30% OK? Put this ticker on my radar since my first dental visit at the beginning of the year.

Q&M Dental to invest S$37m to develop dental business in China
By Jonathan Peeris | Posted: 02 August 2010 2330 hrs

SINGAPORE : Mainboard-listed Q&M Dental Group plans to invest S$37 million over the next three years to develop its dental business in China. It is aiming to tap China's large and rapidly growing market for dental healthcare services.

The group marked its entry into China on Monday with an initial investments of S$4.2 million to provide consultancy services and acquire the clinics of two dental groups - one in Beijing and one in Nanjing.

The two dental groups, called Aiyashi and Dan De, will now carry the Q&M logo in addition to their existing brands. Q&M will also undertake training programmes for the Chinese dentists at its Dental Centre in Singapore.

Separately, Q&M has also entered into an agreement with a dental laboratory based in Zhejiang Province to invest S$5.4 million for a 49 per cent stake in the lab.

The group's CEO Dr Ng Chin Siau said the group is targeting to operate 50 dental clinics in China within the next five years. He added that besides acquiring dental clinics, it also intends to invest in companies that offer dental-related services

[LenaHuat]

Dr Ng has added a plan for 20 dental laboratories by 2015 in China.

Last month, it signed a conditional share sale agreement to acquire 70% stake in a Malaysian dental practice.

I like the last bit of his interview with the BT : "We invest in the latest equipment to improve the quality of its dental services".

[LenaHuat]

I watched Dr Ng on Moneymind last nite and he came across as a reasonable man when he explained the debacle over the "mishiring" of a dentist, suspended in Australia.

In fact, I had anxiously checked my dental record to seek comfort that I was not treated by that suspended Australian dentist .

He sounds ambitious and focused and I am very interested in his plans and more so about the execution. Still tracking this ticker.

[LenaHuat]

10% up. 好开年

[winston]

Not vested.

PE 30 ? No growth ?

Initiate with BUY and target price of S$0.83, based sum-of-the-parts valuation.

Q&M offers investors value at 15x CY12 P/E (cheaper than peers) against our 3-year core earnings CAGR forecast of 30%.

We like it for its strong recurring earnings in the domestic market and international expansion plans.

Stock catalysts could include the opening of more clinics, higher charges, expansion through acquisitions, joint ventures and/or strategic alliances and a potential listing of its overseas dental business.

http://www.remisiers.org/cms_images/QM_ ... t_CIMB.pdf

[LenaHuat]

This ticker in Aspellian's Garden is sprouting shoots It scored a surprising scoop with the IFC taking a stake

[winston]

Not vested

Earnings Outlook and Valuation

With the new investments of a 30% stake in Aiyashi, a 50% stake in Dan De dental group and propose joint ventures with two dental laboratories, Yi Wu He Cheng and Shenzen New Perfect, the China operations could add S$2.8m to the bottom line from 2012.

Together with organic growth in Singapore, earnings growth looks promising.

Currently, the stock is trading at 57.5x 2010 PE and 36.7x 2011 consensus PE.


Our View

Execution risks remain for Q&M to embark on such an aggressive China expansion.

However, if it is able to list the China operation overseas at peers valuation, this could enhance its market value.


Source: UOBKH

[winston]

Not vested

Q & M Dental Group (QNM SP, $0.81, NOT RATED)

The news combo of a proposed TDR issue, the financial endorsement by International Finance Corporation and plans for a separate listing for its China dental operations in the long term has sent Q & M's valuation soaring.

The stock trades at 32x FY11 PER (consensus) and 8.3x P/B.

Its growth outlook, however, does look sexy.


Source: Kim Eng

[winston]

not vested

Trades at 23x trailing PER: based on FY2011 EPS of S$0.0166.

Q&M has a dividend yield of 3.6% based on last close.


Key Risks

Regulatory challenges in China: China does not allow for 100% foreign ownership in healthcare, hence the JV investments Q&M is undertaking. In addition, licensing quotas for dental outlets per city are fixed almost indefinitely, and regulations allow for only one dental outlet within a 1‐km radius.

This is a strong barrier to entry, and is a boon to Q&M if it manages to obtain the licenses through its JV partners; Otherwise, a bane.


Rising labour and rental costs in Singapore: As the dependency ratio ceiling for foreign workers has been reduced in the recent Budget 2012, Q&M may face higher employment costs going forward. On the other hand, rental costs are generally rising in tandem with higher property prices. These add pressure to net profit margins.


Source: AmFraser

[winston]

not vested

Singapore mainboard-listed Q&M Dental Group plans to strengthen its presence in China.

CEO Dr Ng Chin Siau said there's a possibility of acquiring more dental hospitals there.



http://www.channelnewsasia.com/news/bus ... 00124.html