Q & M Dental

[Nick]

Both Q&M and Singapore Medical Group have issued trading halt. Could the pending announcement be related ?

(Not Vested)

[RBM]

My two dollars are on Q&M taking over SG Medical's Dental Studio at the Paragon Mall on Orchard Road. We will see.

Q&M hasn't increased profits at the same rate as they have increased revenues (i.e. margins decreasing) and their gimmick of a share split, which has completely failed to deliver on its objective (share price down, volumes down since the split) has done nothing for the credibility of management. However, Q&M is still picking up dental outlets in Singapore, Malaysia and the PRC.

In the unlikely event I am correct with my two dollar bet (it rarely happens that I am correct with such things), such a transaction would serve to lessen the ridicolously disparate fragmentation and diversity of SG Medical. An SG Medical acquisition of Q&M would be too much to hope for!!

Vested in Q&M Dental, not in SG Medical

Both Q&M and Singapore Medical Group have issued trading halt. Could the pending announcement be related ?

(Not Vested)

[RBM]

Something is "going on" this morning with Q&M Dental ............. bids are now coming in at the S$ 0.40 level, some ~ 31% higher than the last, pre-trading-halt share price of S$ 0.305.

Nothing of note vis-a-vis any highish bids for SG Medical.

Looks like my hunch was likely wrong, as usual. But it looks to me like "more than a coincidince" that both SG Medical and Q&M Dental have had such a prolonged trading halt and initiated their respective halts within hours of each other.

Postscript at close of trading on 26th December 2012: bids were a tad lower, i.e. at the S$ 0.39 level, still some ~ 28% up on the price of the last done deal.

Vested in Q&M

My two dollars are on Q&M taking over SG Medical's Dental Studio at the Paragon Mall on Orchard Road. We will see.

Q&M hasn't increased profits at the same rate as they have increased revenues (i.e. margins decreasing) and their gimmick of a share split, which has completely failed to deliver on its objective (share price down, volumes down since the split) has done nothing for the credibility of management. However, Q&M is still picking up dental outlets in Singapore, Malaysia and the PRC.

In the unlikely event I am correct with my two dollar bet (it rarely happens that I am correct with such things), such a transaction would serve to lessen the ridicolously disparate fragmentation and diversity of SG Medical. An SG Medical acquisition of Q&M would be too much to hope for!!

Vested in Q&M Dental, not in SG Medical

Both Q&M and Singapore Medical Group have issued trading halt. Could the pending announcement be related ?

(Not Vested)

[RBM]

From a Q&M shareholder perspective, I believe this morning's series of announcements is the worst possible outcome, i.e. Q&M's intended acquisition of SG Medical. Q&M is proposing to acquire this disparate, fragmented and unfocused medical company with a doubtfull outlook. Q&M's key attraction hereto has been its focus exclusively on dentistry - that will no longer be the case following this acquisition.

http://info.sgx.com/webcoranncatth.nsf/V...10008DCE3/$file/Press_Release_27122012.pdf?openelement

http://info.sgx.com/webcoranncatth.nsf/V...1000875D7/$file/Announcement_Placement_27122012.pdf?openelement

http://info.sgx.com/webcoranncatth.nsf/V...1000A9572/$file/PreConditional_Announcement_27122012.pdf?openelement

http://info.sgx.com/webcoranncatth.nsf/V...100075104/$file/Announcement_Acquisition_27122012.pdf?openelement

Vested in Q&M Dental, for now.

[shanrui_91]

Doing share placement to raise fund to purchase SMG seemed equivalent to using their expensive shares to buy SMG

"The proposed deal is expected to create a regional healthcare group that offers comprehensive and holistic medical care from unique specialty centres of excellence"

Similar to healthway, specialty centres don't seemed to be very profitable after all.

[pianist]

is it a nice thing to have in this case to "using expensive shares to buy SMG"?

anyway, for q&m to hope for a slice of a china market, i think is quite naive?..because the chinese in general do not care much about oral hygiene.

most of the private dental business there are mainly tapping on tourists money

[CityFarmer]

For those vested and interested...

(not vested)

Q&M acquires 60% stake in China’s Aoxin Stomatology Group for about $21.6 mil

Q&M Dental Group announced that it has agreed to acquire a 60% stake in the Aoxin Stomatology Group for about $21.6 million, through its unit Q&M Dental Holdings (China).

The acquisition marks a major step in Q&M’s expansion plans in China and provides a ready-made stage for Q&M Dental Group to announce its presence in North-Eastern China in the Liaoning, Jilin and Heilongjiang provinces, said Q chief executive Dr Ng Chin Siau.

Under the agreement, Q&M China will receive a profit guarantee from Dr Yongxin Shao, by way of dividends amounting to about $26.6 million, over a period of 12 years.

http://www.theedgesingapore.com/the-dail...6-mil.html

[wahkao]

good company but extremely overpriced!

Will relook once the prices come down

[Drizzt]

good company but extremely overpriced!

Will relook once the prices come down

on what metrics did you say its overprice.

[Aldar]

good company but extremely overpriced!

Will relook once the prices come down

on what metrics did you say its overprice.

Perhaps it's due to the:
- EV/LTM Sales 2.88x
- EV/LTM EBITDA 24.1x
- P/LTM E of 37.2x
- P/B of 4.70x

Based on Maybank Kim Eng's estimates,
- EV/FY13 Sales 2.87x
- EV/FY13 EBITDA 20.9x
- P/FY13 E 33.8x
- P/B 4.59x

However it may not seem high if you compare to historical means (since IPO in Nov 09):
- P/LTM E of 38.4x
- P/B of 6.8x

It may also be trading in line with peers if you select peers such as IHH and Raffles Medical (SG-listed Healthcare peers).

This is an interesting company with:
- network of clinics reaching critical mass in the mature Singapore market
- acquisition of China dental clinics with potential for a spin-off listing leveraging a reputable Singapore brand

Margin of safety...hard to determine unless you derive the intrinsic valuation using DCF; Maybank Kim Eng has projected very aggressive top and bottom line growth of around 20% YoY till 2017.

*Not Vested*