Q&M Dental Group - Managing Post-COVID Growth Expectations
- Q&M Dental (SGX:QC7) saw revenue/core net profit grow 6.9%/28.3% y-o-y in 1Q22, estimated to be driven entirely by its diagnostics business, i.e. COVID-19 testing, compared to the low er intensity of the segment a year ago. On the other hand, revenue from its dental and medical clinics fell 1.6% y-o-y to S$38.6m despite operating 19 more dental clinics compared to a year ago. 1Q22 revenue/net profit missed our expectations at 21.0%/19.4% of our FY22F estimates on lower-than-expected dental core revenue.
- Q&M Dental's 1Q22 interim dividend of S$0.004 was 60% lower y-o-y, representing a payout ratio of 58%, below our 80% payout ratio expectation for FY22F.
- We reduce our dividend expectation from S$0.03 each for FY22F/23F/24F to S$0.018/S$0.020/S$0.022 by cutting our dividend payout expectation to 60% from 80% previously and lower our FY22F-24F earnings forecasts by 5-12% on weaker revenue intensity assumptions and lower margins from the diagnostics business.
- Reiterate ADD on Q&M Dental with lower target price of S$0.73.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
TAY Wee Kuang CGS-CIMB Research | Kenneth TAN CGS-CIMB Research | https://www.cgs-cimb.com 2022-05-12 2022-05-12
Read also CGS-CIMB's most recent report:
2022-11-14 Q&M Dental Group - Dental Core Revenue Growth Commendable.
Previous report by CGS-CIMB:
2022-10-12 Q&M Dental Group - Tender Win Alleviates Short-Term Pressure.