Singapore Daily
Q & M: A Gem In More Ways Than One; Initiate Buy, $0.305 - TP $0.41
QNM SP | Mkt Cap USD147m | ADTV USD0.2m
Ø Q&M is the rarest gem in the global dental sector – the
best-performing by margins, ROE and growth in a sector where only four
listed peers can be found but the cheapest. At 34x FY14F forecast, we
believe it is still undervalued now ahead of organic profits from new
dental outlets in its 3 key markets and new revenue stream from medical
clinics in Singapore.
Ø Q&M has proposed to acquire two dental groups in China, its largest
acquisitions to-date. If completed, we expect it to boost FY14 earnings
and our target price by 39%. Dental businesses in China have shown far
more earnings growth and margin potential.
Ø Q&M has plans to unlock the value of its China operations via an IPO
in future, but already private equity firms have sniffed the investment
potential. Kunwu Jiuding’s proposed purchase of a 20% stake for RMB200m
places a value of RMB1b (SGD200m) on Q&M’s China operation, higher than
Q&M’s entire market cap in Singapore.
Click here for full report
johncheong@maybank-ke.com.sg
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