Q&M Dental Group - DBS Research 2022-11-17: Slowdown Expected In Dental Business

Q&M Dental Group - Slowdown Expected In Dental Business

  • See Q&M Dental's announcement dated 13 Nov 2022 for its 3Q22 earnings update –
    • Core Dental and Medical Clinics:
      • 3Q22 revenue for the core dental and medical clinics segment remained largely stable y-o-y and q-o-q.
      • Read this at SGinvestors.io -
      • Q&M Dental Group plans to open two new clinics in Singapore in 4Q22, bringing the total number of clinics to 113 (31 Dec 2022) from 111 (30 Sep 2022).
      • Focus will also be on optimising the productivity of each clinic with internal key performance indicators to be monitored.
    • Medical Laboratory and Dental Equipment & Supplies:
      • Read this at SGinvestors.io -
      • Acumen Diagnostics won a Singapore MOH tender for one Joint Testing Vaccination Centre (JTVC) in Oct 2022 for 15 months till 31 Dec 2023, value of contract at least S$3.6m.

Our thoughts on Q&M Dental Group

  • 3Q22 revenue for Q&M Dental Group's core primary healthcare segment remained largely stable y-o-y and q-o-q despite the opening of 16 new dental clinics in Singapore and 8 new dental clinics in Malaysia since 30 Sep 2021, possibly due to the reopening of borders and Singaporeans seeking dental treatment overseas.
  • Going forward, we will be factoring in a longer gestation period for the new clinics as we await the ramp-up in profitability, which seems to be taking longer than expected.
  • Meanwhile, the medical laboratory and dental equipment & supplies segment turned loss-making due to the significant fall in demand for COVID-19 testing in Singapore and the reduction on COVID test prices to maintain competitiveness.
  • While 9M22 revenue of S$133.4m is roughly on track for our FY22F estimate, Q&M Dental Group's 9M22 PATMI of S$13.5m makes up only ~60% of our FY22F estimate, as both segments performed below expectations.

Our thoughts post-briefing by Q&M Dental Group's management

  • Read more at SGinvestors.io.

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.

Tabitha FOO DBS Group Research | Paul YONG DBS Research | https://www.dbs.com/insightsdirect/ 2022-11-17

Previous report by DBS:
2022-08-15 Q&M Dental Group - Expansion Plan Delayed; Disappointing 1H22 Performance.

Price targets by 3 other brokers at Q&M Dental Target Prices.
Listing of research reports at Q&M Dental Analyst Reports.

Relevant links:
Q&M Dental Share Price History,
Q&M Dental Announcements,
Q&M Dental Dividends & Corporate Actions,
Q&M Dental News Articles

SGX Stock / REIT Search


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