Q & M DENTAL GROUP (S) LIMITED (SGX:QC7)
Q&M Dental Group - The New Normal
Recent Q&M Dental share price weakness creates buying opportunity
- Q&M Dental's share price has pulled back by > 20% from recent peak post its 2Q21 results on profit taking, along with general market weakness. Given no change in earnings outlook, we see the current share price as a good entry level and provides a window of opportunity for those investors that missed the previous rally.
- Following the completion of 1:5 bonus issue (see Q&M Dental's corporate actions), our target price for Q&M Dental (SGX:QC7) has been adjusted to S$0.85, still pegged at 22x FY22E P/E (~20% discount to peers’ average). With 49% upside potential, maintain BUY.
COVID-19 testing set to become the new norm
- According to Minister Lawrence Wong, Singapore will stay in the current preparatory stage of its reopening, and will continue to rely on vaccination and testing to keep the COVID-19 situation under control amid a recent spike in infections.
- With about 85% of the population likely to be fully vaccinated by the end of Sep, Mr Wong said Singapore should aspire to be a nation of testing, where testing becomes a way of life in this endemic.
Increases frequency/coverage of mandatory tests
- In fact, Singapore is increasing the frequency of COVID-19 malls and supermarkets as well as delivery personnel and transport workers.
Q&M is on track to deliver strong 2H21 earnings
- Going forward, Q&M Dental also wants to widen as swabbing and vaccination.
- See
- For FY21E, we estimate about S$10m earnings contribution for its 51% share of testing business (1H21: ~S$4m). Meanwhile, dental outlet expansion is on track as Q&M Dental had added 10 new clinics year-to-date in Singapore and is targeting to open another 10 by 4Q21.
- See also Q&M Dental's ESG metrics and issues in report attached below.
Eric Ong
Maybank Kim Eng Research
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https://www.maybank-ke.com.sg/
2021-09-14
SGX Stock
Analyst Report
0.85
DOWN
1.030
