Firm' s new AI platform meant to reduce the chance of misdiagnoses, recommend treatment plans in a more objective, transparent way.

 

A FLAW in the dental industry lies in how some dentists prescribe treatment plans simply because they prefer certain procedures. This comes at the expense of patients, said Ng Chin Siau, chief executive of Q& M Dental Group.

 

In 2018, Q& M established a company, EM2AI, to work on artificial intelligence (AI) projects that target pain points such as this. EM2AI is now preparing for clinical trials to get approval from the Health Sciences Authority for its AI platform, under the Class B medical device category.

 

The new AI platform is meant to reduce the chance of misdiagnoses, and recommend treatment plans in a more objective and transparent way.

 

The group dug through more than 10 years of its archives to analyse tens of thousands of X-rays. It partnered a university in Malaysia for the platform' s decision tree, which can come up with millions of permutations, and worked with the National Research Foundation' s AI Singapore to develop the machine learning model.

 

" We are very happy to say that we put in a lot of hard work initially to find ways to get this done," Dr Ng told The Business Times.

 

" We learned so much about cleaning data to make it AI-ready. In future, Q& M will only have AI-ready data. We also are looking into cleaning the past records. The more the machine learns with this data, the faster and more accurate the outcome."

 

Once approved, EM2AI' s product will be rolled out at Q& M' s clinics before being sold to others. " The monetisation part, we are not worried. We want to get the job done properly first to ensure that we are giving good advice based on this AI for the benefit of our patients," said Dr Ng.

 

New areas of growth

 

Q& M is now also looking into investing in startups, especially in the fields of AI and medtech. Raymond Ang, chief operating officer of Q& M, said startups in the proof-of-concept or production stage have been approaching the company.

 

The group could take guidance from medtech investor Heritas Capital, its 8.1 per cent shareholder. Heritas, a fund management subsidiary of IMC Group, has backed companies including cancer immunotherapy startup Tessa Therapeutics and precision medicine startup Hummingbird Bioscience.

 

" Even traditional healthcare services can leverage tech to enhance access and quality," said Chik Wai Chiew, CEO of Heritas.

 

" Especially in Asia, where healthcare resource constraints mean demand will remain underserved, creative application of tech to optimise and scale solutions to benefit providers and patients are critical priorities."

 

Q& M has also tapped opportunities that emerged in the wake of the pandemic. On May 20, shares of the company gained as much as 6.7 per cent on news that its subsidiary had won a government tender to provide swab and testing services.

 

Dr Ng expects the Covid-19 business to do well as Singapore ramps up nationwide testing. Q& M' s role in it is thanks to the acquisition of a Covid-19 test kits business from biotech company Acumen Research Laboratories (ARL) in July 2020.

 

Acumen Diagnostics, the joint venture for the Covid-19 business, is in the process of doubling the number of polymerase chain reaction (PCR) tests its lab can run per day. But the small pool of lab technicians in Singapore continues to be a limiting factor.

 

Q& M is already reaping some returns from its latest venture. In the first quarter ended March 31, 2021, revenue from equipment distribution and laboratory tests grew to S$4.6 million from S$1.6 million mainly due to the Covid-19 business.

 

Because Acumen produces its own test kits, it has better control of its margins compared to other companies, Dr Ang said.

 

Strengthening the core

 

Analysts are generally sanguine about Q& M' s core business, where it operates over 120 clinics. DBS Group Research, which has a " buy call" on the stock, called the dental business " resilient" with key drivers being border closures and flexibility of visiting dentists during remote working.

 

Over the next 10 years, Q& M is aiming to open at least 30 dental clinics a year in Singapore and Malaysia. It already owns the largest network of private dental outlets in Singapore.

 

Dr Ng believes that it is a tough goal but one that the company must aspire towards. Singapore' s dentist to population ratio of 1 : 2,304 as of 2019 is still much lower than that of other developed countries including Taiwan and Japan.

 

Despite the pandemic, revenue from dental and medical clinics grew 41 per cent in Q1 to S$39.2 million due to higher revenue from Singapore outlets.

 

Net profit jumped to S$9.4 million from S$1.3 million after including net other gains of S$4.3 million, which was mainly due to the disposal of the remaining 12.2 per cent of Chinese associate Aidite.

 

Q& M intends to grow its clinics organically, though it is likely to face challenges in the supply of dentists.

 

" Starting a new clinic with a capex of less than S$200,000 and with a chance of making it profitable in six months to one year' s time is always a better choice (than acquiring). Plus, we control the dentist quality that we take in," said Dr Ng.

 

Vietnam and Indonesia are also potential markets due to their middle class population and strong dental schools.

 

As for inorganic growth, Q& M will continue its strategy of investing in businesses, scaling up operations, and taking profit either through dividends, an initial public offering, a reverse takeover or a sale.

 

It is doing so for Acumen and did so for its Chinese dental arm Aoxin Q& M, which listed on the Catalist in 2017 with a S$71.2 million market value. More recently, Q& M divested its stake in Aidite, a manufacturer of zirconium oxide blocks used to manufacture dental prosthesis. It resulted in two rounds of special dividends at a time when most companies were hoarding cash.

 

Q& M has consistently delivered dividends to shareholders and its net profit has been on an upward trend since 2011.