Q&M Dental Group - UOB Kay Hian 2021-11-12: Robust 3Q21 Results & Positive Outlook; Confidence In Increased Stake In Acumen

Q & M DENTAL GROUP (S) LIMITED (SGX:QC7) | SGinvestors.io Q & M DENTAL GROUP (S) LIMITED (SGX:QC7)

Q&M Dental Group - Robust 3Q21 Results & Positive Outlook; Confidence In Increased Stake In Acumen

  • Q&M Dental’s 3Q21 earnings of S$9.7m (+57% y-o-y) were in line with expectations, 9M21 core earnings met 73% of our full-year estimate. Both dental and medical laboratory delivered robust results.
  • Q&M Dental added 14 new dental outlets (+12% y-o-y) and has increased its effective interest in Acumen from 51% to 67%, indicating a strong vote of confidence.
  • We are positive on Q&M Dental’s outlook given its robust expansion plan and strong demand for testing services. Maintain BUY.



Q&M Dental's results in line, 3Q21 earnings grew 57% y-o-y and generous dividend payout.

  • Q&M Dental Group (SGX:QC7)'s 3Q21 earnings of S$9.7m (+57% y-o-y) were in line with expectations, 9M21 core earnings met 73% of our full-year estimate.
  • Both dental and medical laboratory delivered robust results due to strong demand for their services. Revenue contribution from dental and medical clinics increased 5% y-o-y to S$39m and contribution from the medical laboratory and dental equipment & supplies segment soared 932% to S$18m.
  • Q&M Dental declared an interim dividend of S$0.01 per share (100% payout ratio) for 3Q21, which translates into a full-year dividend yield of around 7%.


Double-digit expansion of new dental outlets paves way for future growth.

  • Q&M Dental has added our expected double-digit earnings growth in the dental segment.


Raising its effective stake in Acumen indicates a strong vote of confidence in the medical laboratory business.



Aggressive expansion in the number of new dental clinics from 2019 onwards.

  • Q&M Dental has assume that Q&M Dental will add 10 new outlets in Singapore each year.
  • Expect robust growth for 2021 driven by twin engines. We expect Q&M Dental’s core earnings to grow by 68% y-o-y to S$33m, driven by:
    1. an 18% y-o-y COVID-19 testing business, assuming 2,200 tests per day at the rate of S$70 per test.


Q&M Dental Group - Valuation






John Cheong UOB Kay Hian Research | https://research.uobkayhian.com/ 2021-11-12
SGX Stock Analyst Report BUY MAINTAIN BUY 0.78 SAME 0.78



Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......



ANALYSTS SAY


loading.......