Maybank Kim Eng analyst Eric Ong has commenced coverage on Q&M Dental Group with a ‘buy’ rating and target price of 87 cents.

His target price is pegged to an FY2021 P/E ratio of 22 times, which implies a 15% discount to the sector average of 26 times. 

In a research note dated March 29, Ong says he expects the group to close the valuation gap against its bigger listed peers due to a more superior earnings trajectory for FY2021 to FY2023, underpinned by growth from its new Covid-19 testing business and opening of more clinics.

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