Q&M Dental Group - DBS Research 2022-11-17: 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 an excerpt from a report by DBS Group Research.
Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.

Read also DBS's most recent report:
2023-03-15 Q&M Dental Group - Border Reopening & Gestating Assets To Remain A Drag.

Price targets by 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 Dividend Payout Dates & Corporate Actions,
Q&M Dental News