Q & M DENTAL GROUP (S) LIMITED (SGX:QC7)
Q&M Dental Group - More Testing
2Q21 shows potential of testing business
- Q&M Dental (SGX:QC7)'s 2Q21 reported PATMI rose 23% y-o-y to S$8.4m, which brings 1H21 earnings to S$17.8m (+119% y-o-y) or about 50% of MKE/street consensus’ full-year estimates. It was a slight beat considering our/market expectation of a stronger 2H21, mainly due to its continued dental clinics expansion and ramping up of testing operation.
- While our earnings per share forecasts are largely unchanged, we raise our target price for Q&M Dental to S$1.03 as we roll forward valuations to FY22E, still based on 22x P/E. Maintain BUY.
Expansion of Singapore outlets on track
- Q&M Dental's 2Q21 total revenue doubled to S$50.8m, driven by higher turnover in its core dental division (+86% y-o-y) and estimated contribution of S$10-11m from the testing business (1Q21: S$2-3m; 1H20: NIL).
- In Jun ‘21, Q&M Dental opened one clinic in Jurong Yuhua. It has also secured locations to open six more dental clinics island-wide and is expected to commence operations by 4Q21. Year-to-date, Q&M Dental has added 10 clinics to its network and it’s targeting to open another 10 by 4Q21. However, expansion in Malaysia has slowed down due to MCO amid the worsening pandemic.
Aoxin Q&M to acquire 49% of Acumen
- Q&M Dental’s 43.94%-owned associate Aoxin Q&M (SGX:1D4) is acquiring 49% of Acumen Diagnostics for stake in Aoxin Q&M and Acumen will be ~33% and ~67% respectively.
Proposed 1:5 bonus issue and 2nd interim dividend
- Testing demand should remain firm as Singapore prepares to live with bonus share for every 5 existing shares held, while a 2nd interim dividend of S$0.01 was also declared.
- See
Eric Ong
Maybank Kim Eng Research
|
https://www.maybank-ke.com.sg/
2021-08-17
SGX Stock
Analyst Report
1.03
UP
0.870
