Q&M Dental

Q&M Dental: AmFraser has an unrated note. House note that grp is benefitting from the Community Health Assist Scheme (CHAS) which Q&M and where Singaporeans benefit from subsidized medical and dental care. The scheme is effective from 15 Jan 2012, and house expect this to increase demand for Q&M’s basic dental services in SG, strengthening its recurrent income base. Growing list of 300-strong corporate clients: Just this year, Q&M signed MOUs with the National Taxi Association (NTA) and the NTUC’s Attractions, Resorts and Entertainment Union (AREU) to provide dental healthcare to its members at a discount. The former has 11,000 taxi members and the latter about 400 tour guides. (The members may or may not be part of CHAS.) Aggressive expansion plans in Singapore, China and to a lesser extent in Malaysia: Q&M aims to 1) add 60 dental outlets in Singapore by 2015; 2) add 50 outlets and 20 dental labs in China by 2015; and 3) add 15 outlets in Malaysia by 2015. There is also a plan to list its China dental business in 5 years—a defined strategy to realize shareholder value. Q&M aims to raise funds from the equities market to fund these plans. Overall, grp trades at 23x trailing P/E and has a dividend yield of 3.6% based on last close.