Q&m Dental Group Case Study

 Q&M Dental Group (QNM.SP)                                                        BUY[pic 1]

Target Price: $0.88[pic 2][pic 3][pic 4][pic 5][pic 6][pic 7]

  Share Price: $0.79[pic 8]

    Up/Downside: 11.39%

[pic 9]Growth Opportunities Lies Ahead        [pic 10][pic 11]

Acquisition growth in the near future

[pic 12]Q&M has expanded rapidly throughout the years. In the first half of 2015, it has acquired 10 dental clinics in Singapore and another 6 in Malaysia. After the acquisition, Q&M still has S$29.6million from the issue of the S$60million Medium-term Note. We are expecting more
acquisitions in the later half of the year.[pic 13]

Moving upstream and downstream the value chain to cut costs

In 2014, the acquisition of a dental materials manufacturer, Aidite, and a dental product distribution company, Aoxin, in China signals its plans to move both upstream and downstream to become its own dental products supplier and distributor in an attempt to lower operational costs.                [pic 14]

China as growth centre

Q&M is exploring a possible spin-off its dental subsidiaries in China. We think that the listing abroad would give Q&M access to additional sources of funding for more acquisitions in the near future. Also, Q&M will assist its China’s dental materials manufacturing company in future research and development to explore the possibility of creating new products.

Optimism in the near future

Year 2014 have yielded decent results but we believe that it conservative taking into account that the acquisition of Aidite and Aoxin were acquired in the later half of 2014. Together with heavy expansion opportunities locally and in abroad, we are highly optimistic about the earnings in 2015.

 1. Introduction to Q&M Dental Group (Singapore) Limited

1.1 Company Information

Q & M Dental Group (Singapore) Limited operates private dental outlets. The company largely deals with primary healthcare, as well as some focus on dental equipment & supplies distribution, and dental supplies manufacturing segments. Q&M provides primary healthcare services which include comprehensive dental healthcare services, health screening services and offers aesthetic and laser services. Furthermore, the company also provides dental laboratory, consultancy, and general medical services; trades in dental surgery materials and equipment; manufactures and trades in medical and dental instruments and supplies; and leases dental equipment. [pic 15]