SINGAPORE (July 30): Dr Ng Chin Siau, group CEO of Q&M Dental Group (Singapore), has been regularly buying shares in the company. On July 24, via his 43.91%-owned Quan Min Holdings, Ng bought 125,300 Q&M shares in the open market at an average price of 53.68 cents. This is just above the 52- week low of 49 cents reached early this month. The purchase added 0.02% to his total stake in Q&M, which he founded in 1996, making it now 51.42%. His total stake of more than 405.7 million shares consists of just over 11.4 million directly held shares and nearly 394.3 million deemed shares.
Prior to the purchases on July 24, Ng made at least eight other rounds of purchases via Quan Min. The total daily volume of shares bought ranged from 78,000 (on July 2) to 632,000 (July 17). The average price per share paid was in a tight range of between 49.9 cents on July 16 and as high as 52.13 cents for the most recent purchases made on July 24. In the previous month, several rounds of purchases were made as well.
As at July 24, Q&M was trading at a price-to-earnings ratio of around 17.5 times — higher than the broader Straits Times Index, but relatively low compared with the healthcare sector, where earnings multiples can go up to dozens of times. Raffles Medical Group, for example, trades at just over 27 times.
On May 14, the company announced that earnings for the three months ended March 31 was $4.5 million, up 17% from $3.8 million in the corresponding period last year. Revenue in the same period also rose, by 4% y-o-y to $26.7 million.
Less than a week before releasing the results, Q&M announced that its planned acquisition of a stake in a China-based company had fallen through. Last year, the company announced on July 2 that it had signed a memorandum of understanding dated June 29 to buy 20% of Shenzhen Superline Technology, a manufacturer of nickel-titanium endodontic root canal files and orthodontic arch wires. “
Various discussions were held between the company and the vendors. However, no agreement could be reached,” the company stated on May 9, 2018, without specifying what happened.
Even with this proposed acquisition falling through, Q&M remains upbeat on its prospects in China. It is still keen to grow in this market. Among other things, it may seek out and acquire larger and established dental institutions and dental supplies manufacturers in China. It is also on a continuous lookout for joint ventures and strategic alliances.
Besides China, Q&M has ambitions to grow its core markets in this region. As at end-March, the company had 69 dental outlets and four medical outlets in Singapore. At the end of the year-earlier quarter, the company ran 71 dental outlets, four medical outlets and one aesthetics centre. “The group believes it is well positioned to cater to the rising demand for primary and higher-value specialist dental healthcare services,” stated the company on May 14, when it announced its most recent quarterly earnings. This year, Q&M plans to add at least 10 dental clinics in Singapore.
Q&M plans to grow quickly in Malaysia, too. As at March 31, it was running 14 dental outlets there, up from seven in the year-earlier period. It is planning another 10 clinics in Malaysia. “The eventual number of dental clinics will depend on opportunities and market conditions,” it added.
As at March 31, Q&M had cash and equivalents of $38.4 million, versus bank borrowings and finance leases of $86.7 million. Book value was 14.8 cents, up slightly from 14.2 cents as at Dec 31, 2017, the preceding quarter.
“The focus over the past 12 months has been on strengthening our core dental and medical business. I am pleased to note the increase in revenue from our dental clinics in Singapore and Malaysia,” says Ng.
