Home Capital SGX Research Series: 10 in 10

Quantum Healthcare in new growth chapter

Candace Li
Candace Li9/28/2022 07:46 PM GMT+08  • 7 min read
Quantum Healthcare in new growth chapter
Quantum Healthcare is a healthcare company specialising in the fields of dental services, medical equipment, wellness services to R&D / Quang Tri Nguyen via Unsplash
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

1. What does Quantum Healthcare do?

Quantum Healthcare is a healthcare company specialising in areas ranging from dental services, medical equipment and wellness services to R&D. Our recent internal restructuring and diversification into the healthcare business aims to bolster the long-term growth of our three core business units:

• Healthcare Business

Provision of dental services, as well as operations management and consultancy services to certain government entities and corporate clients.

• Medical Equipment Business

Research, develop and design of medical equipment and other related products including geriatric medical rehabilitation equipment and medical equipment for use in hospitals as well as for emergency and rescue; and engage in the trading, manufacturing, distributing or marketing of these medical equipment.

See also: Frasers Centrepoint Trust captures the suburban wave

• Medical and Wellness Business

Provision of all-inclusive medical care that extends beyond the realms of aesthetics and wellness.

2. What are the key drivers behind the restructuring?

See also: First REIT balances growth and security

After the restructuring, the company, to a much lesser extent, continues to be engaged in the design, assembly and distribution of advanced therapeutic solutions for the minimally invasive treatment of complex vascular diseases.

The three new core businesses provide the company with additional and recurrent revenue streams for long-term growth and reduced reliance on the existing vascular medical device business. We expect the Healthcare Business to provide higher margins, the Medical Equipment Business to provide higher revenue and more consistent cash flow generation, and the Medical and Wellness Business to provide long-term future growth potential.

The company has also identified the following prospects when considering the restructuring: rising income and educational levels; increasing and ageing population; growth in the medical tourism industry; strong government support for eldercare and; social acceptance of aesthetic medical treatments.

After pivoting to the healthcare business, Quantum Healthcare has seen revenue of around $4.1 million for the six months ended June 30, a 100% increase as compared to the six months ended June 30, 2021. This was mainly contributed by the acquisition of Asia Dental Group and its subsidiaries on Jan 13.

3. Following the completion of the restructuring, what are some key considerations when it comes to investing in new business opportunities and partnerships in the future?

Our future direction is to focus on our new businesses and be an Asean leader in the healthcare space across the three new core businesses. We will also keep a look out for good companies to acquire and grow the overall business. This will ensure greater ease and flexibility in positioning ourselves to expand or divest existing business segments; and explore investment opportunities, new businesses and business partnerships should any good opportunities arise.

In the near term, our priority is to monitor and grow the dental healthcare business in Singapore while keeping a look out for potential new strategic business acquisitions and partnerships. Key considerations for investment in new business opportunities and partnerships include business and profitability track record of the potential opportunity; involvement of key management of the new potential business in the future; and future outlook and growth potential of the new business opportunity and partnership.

For more stories about where money flows, click here for Capital Section

4. How would you describe Quantum Healthcare’s competitive edge?

With the broader scope of core business activities, we have entered or intend to enter into, the group is well positioned to minimise its risks by not focusing solely on one particular segment of the healthcare market.

In addition, we provide multi-disciplinary and accessible dental healthcare through our diverse range of products and services while our management team specialises in identifying accretive acquisition opportunities to provide a good return for our shareholders.

We emphasise a foundation of superior and cutting-edge healthcare through our rigorous research and experimental development in medical science and biotechnology. This allows our innovations to remain revolutionary and purposeful on the back of our desire for progressive evolvement in R&D.

5. Quantum Healthcare has been revenue-generating since the acquisition of several dental clinics. Can you share more about these dental clinics?

We own a total of seven operating dental clinics in Singapore that provide dental healthcare-related services. Recent acquisitions in HY2022 include Asia Dental Group and its subsidiaries.

On March 31, Quantum Healthcare completed the acquisition of three Eastern Dental Surgery clinics for a total of $1.3 million. The clinics are located in Jurong West, Bukit Batok and Jurong East.

We also own an R&D facility-focused entity, Kairogenix, involved in the research and experimental development of medical science and biotechnology.

6. What are the different types of dental care and treatments Quantum Healthcare provide?

We aim to be one of the major players in the local private dental healthcare space through acquisitions to grow our number of dental clinics in Singapore. With a team of passionate and experienced dentists, coupled with total access to a broad range of products and services, we aim to provide multi-disciplinary and accessible dental healthcare for all our patients in areas such as:

• Aesthetic Dentistry — Denture fittings, crowns and bridges, implants, bonding veneers, and teeth whitening

• Orthodontics — Fixed and removable braces

• Implant Dentistry — Multi-purpose treatment to replace the roots of missing tooths, denture wear

• Preventive & Restorative Dentistry — Dental check-ups, gum disease and laser treatment

• Pediatric Dentistry — Oral healthcare services for children and teenagers under 18

• Advisory & Consultancy Services — Dental management solutions through an evidence-based method

7. How will you maintain and uphold product and corporate governance?

We always had and will continue to prioritise the quality of our products and services, uphold strong business ethics and maintain full compliance with regulations.

8. What are some potential risks ahead?

In the near term, the following risks may arise which can affect Quantum Healthcare’s financial performance:

• Ability to continue obtaining financing (through equity or bank loans) to support the group’s overall growth;

• Increasing operational costs which will have an impact on the overall profitability of the company’s healthcare business; and

• A slowdown in the global economy arising from Covid-19 and the Russia-Ukraine war negatively affects overall business sentiments in the market.

To manage these risks, we intend to:

• Maintain and build existing and new banking relationships with financial institutions;

• Tap Singapore government’s new budget measures such as the Enterprise Financing Scheme and Temporary Bridging Loan Programme for mergers and acquisitions and working capital respectively; and

• Maintain a board of directors with diversified skills and industry experience and streamline the group’s operations for potential cost savings in the long term.

9. What value proposition does Quantum Healthcare offer to its shareholders?

With new management in place and the diversified nature of our new core businesses, Quantum Healthcare is well positioned to tap new business opportunities and the growth potential that they bring.

In addition, Quantum Healthcare’s key management team are also substantial shareholders of the company, proving their long-term commitment to the future growth and profitability of the group. It is the goal of the management to translate this commitment into generating sufficient cash flows for dividends to shareholders in the long term.

10. Should investors be concerned or optimistic about the new restructuring?

We believe that our investors should be optimistic about the restructuring as it will allow the company to:

• Reduce its reliance on a single core business;

• Tap on new business opportunities to grow the company’s revenue and profitability in the long term; and

• Enable management and the board to be able to monitor the growth of each core business more effectively.

Candace Li is a research analyst with the Singapore Exchange

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.