Q& M Dental Group (Singapore) posted a net profit of S$9.4 million in the first quarter - about seven times higher than the year-ago period - largely due to a one-off gain on its divestment of Aidite (Qinhuangdao) Technology earlier in January.

 

Total revenue stood at S$43.8 million for the quarter ended March 31, 2021, 47 per cent higher than the year-ago period.

 

Earnings per share came in at 1.2 Singapore cents, with an interim dividend of one cent per share declared for the quarter, said Q& M in an update on Friday evening.

 

Key operating expenses rose 37 per cent to S$33.2 million, from S$24.2 million in the year-ago period. These include consumables and supplies used, cost of sales of dental equipment and supplies distribution, cost of sales of test kits and laboratory tests, employee benefits expense and depreciation of right-of use assets.

 

About 89 per cent of the group' s Q1 revenue came from its core business of dental and medical clinics, with the remaining 11 per cent from dental equipment and supplies distribution.

 

The group currently has 85 dental outlets in Singapore, 36 in Malaysia and 17 in China. It said it aims to expand further in Malaysia, especially in Johor and Klang Valley, and will continue to monitor the Malaysian economy closely.

  Q& M Dental announced the plan more than a year ago.

Q& M Dental Group will not proceed to set up a surgical mask manufacturing company with partners, as announced more than a year ago.

 

This is after it and its partners failed to meet definitive terms under a non-binding memorandum of understanding (MOU), as made public on March 11, 2020, Q& M Dental said in a regulatory filing on Saturday (May 29).

 

Q& M Dental had meant to partner with Hubei Aishubao Living Supplies and Guangzhou Pharmasen. They had intended to set up a joint venture for the proposed business.

 

The MOU was due to terminate if definitive agreements over the proposed investment were not entered into within one year of the date of the MOU.

 

" As at the date of this announcement, parties have failed to successfully negotiate and finalise the terms of the definitive agreements," Q& M Dental said. " Consequently, the MOU is now terminated, and no party has any further obligation or liability against each other in respect of the MOU."

 

On May 14, Q & M Dental Group (Singapore) independent non-executive director Harry Ng Weng Sui acquired 60,000 shares of the company for a consideration of S$37,800, at 63.0 cents per share.

 

This increased his total interest in the private dental healthcare group from 0.03 per cent to 0.04 per cent.

 

Mr Ng is currently the executive director of HLM (International) Corporate Services, a company that provides business consultancy, accounting and corporate service.

 

On May 17, Chong Kai Chuan, the appointed alternate director to Q & M chief operating officer Raymond Ang Ee Peng, decreased his interest in the company.

 

Dr Chong disposed of 100,000 shares at an average price of 65.6 cents per share, reducing his interest in the company from 0.32 per cent to 0.31 per cent.

CGS-CIMB, Maybank Kim Eng see upside potential from group' s testing services segment

 

SHARES of Q& M Dental Group gained 2.2 per cent on Wednesday, following the previous day' s news that the dental service company' s subsidiary had won an open tender by the Health Promotion Board (HPB) for the provision of Covid-19 swab and testing services.

 

The counter had gained as much as 6.7 per cent to reach 71.5 cents at 9.24am, after about 6.6 million of its shares changed hands. The share price later eased to 68 cents around 10.55am before pausing at 68.5 cents, up 1.5 cents or 2.2 per cent, by the midday trading break.

 

In the second half of the trading day, the stock rose to touch 70 cents at around 3.50pm, before paring some gains thereafter. The counter closed at 68.5 cents on Wednesday.

 

With the latest HPB tender awarded to Q& M' s 51 per cent-owned subsidiary Acumen Diagnostics, CGS-CIMB is expecting Q& M to potentially conduct an additional 900 daily tests from just Phase 1 sites.

 

" Our current assumptions are 1,500 tests per day, and we see upside to our earnings per share (estimates). Conservatively, due to lower average selling prices and margins due to the competitive public tender, we expect potential earnings contribution from Phase 1 sites of about S$1 million," wrote CGS-CIMB analysts in a research report on Wednesday.

 

" We think Phase 2 execution could be more feasible in the later part of 2021 as there have been no alarming cases observed yet in dormitories," they opined.

 

The research house has an " add" call on the stock with an unchanged target price of S$0.97, which is based on a 25 per cent discount to Q& M' s peers due to its smaller market cap.

 

CGS-CIMB in March estimated that Q& M' s new Covid-19 diagnostic testing segment and the sale of test kits via Acumen could contribute about 38 per cent of the group' s core net profits for FY2021-2022.

 

Maybank Kim Eng also sees upside potential from the group' s new Covid-19 testing business segment, with expectations for Acumen to grow its contributions to Q& M' s bottom line for the rest of the year.

 

" Moving forward, (Acumen) will continue to ramp up this business via automation to improve efficiency and productivity to cater for higher number of swab tests conducted by the government, as well as expanding its in-house laboratory testing to include serology tests," wrote Maybank analyst Eric Ong in a separate Wednesday report.

 

The brokerage has reiterated its " buy" call on Q& M and its target price of S$0.87 remains intact, pegged at a 15 per cent discount to the company' s bigger listed peers.

 

Established in April last year, Acumen is a joint venture between Q& M and the founder of Acumen Research Laboratories, Ong Siew Hwa.

 

The medical technology firm has a Covid-19 clinical lab where polymerase chain reaction tests for Covid-19 are processed.

 

Acumen participated in HPB' s latest open tender exercise on March 1. It was announced as one of the six successful awardees of the tender via the GeBiz portal on May 17.