Company Overview

Established in 1996 in Singapore, Q & M Dental Group is Singapore’s largest private dental healthcare group with over 80 dental clinics island-wide. It offers a comprehensive range of primary care dental services and specialist services. Among its more than 240 qualified and experienced dentists, about 50 are specialists or dentists who have undergone extensive post-graduate training either locally or from various established training institutions overseas.
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1. What Are the Services Provided by Q & M Dental?

• Q & M owns the largest network of private dental outlets in Singapore, operating 87 dental outlets across the country. The services provided includes dental care and medical care. The Group also operates 37 dental clinics in Malaysia and 1 in China.

• In 2019, Q & M has ventured into the dental education market, providing graduate diploma courses for dentists in Singapore. In view of the global COVID-19 pandemic, the group has also expanded into the medical laboratories and research industry with the incorporation of Acumen Diagnostic Pte Ltd for sales and distribution of COVID-19 test kits and provision of laboratory testing.

2. Could You Elaborate on the Group’s Revenue and Business Model?

• The Group’s revenue comprises of Dental & Medical Clinics, and Medical Laboratory and Dental Equipment & Supplies, with the dental core business contributing to 75% of the Group’s revenue in the 2Q2021. We have a focus on organic growth and currently own 100% of clinic operationsin Singapore.

3. What Is Q & M’s Competitive Edge Versus Your Peers?

• Serving over 10% of the local population, the distinct brand of Q & M has been recognised and endorsed by various organisations. The group has more than 40,000 recurring patient visits per month, and more than 9,000 new customers each month.

• We have over 240 qualified and experienced dentists, of which more than 50 are specialists or dentists who have undergone extensive post-graduate training either locally or from various established training institutions overseas. The large pool of qualified dentists allows the group to provide a comprehensive range of primary dental care services. We also have over 300 well-trained nurses and supporting staff providing dentists and customers with efficient service.

4. What Are Some Recent Developments by the Group?

• We have made inroads in the development of advanced technology in healthcare with the establishment of EM2AI Pte Ltd, which focuses on developing Artificial Intelligence (AI) powered solutions in diagnosis and treatment planning. Through the collaboration with International Medical University, the system aims to improve the quality and experience of patient treatment. It will be the first of its kind in Southeast Asia to be used in the dental healthcare landscape.

• Training and education are an integral part of a dentist’s profession. Our Q & M College of Dentistry aims to provide a platform for dentists to upgrade their skills and learn best practices in Dentistry, with our first batch of students graduating in the next few months. Moving forward, the college will also provide enhanced courses to dentists in Singapore.

• Our subsidiary, Acumen Diagnostics, was granted a healthcare institution licence from the Ministry of Health for the operation of a clinical laboratory for conducting SARS-CoV-2 PCR testing services for COVID-19 on 14 September 2020. The Acu-corona series of SARS CoV-2 RT-PCR tests are already being used in other countries including Malaysia and Indonesia. Furthermore, Acumen was selected as one of the six successful awardees of the open tender exercise by HPB for the provision of COVID-19 swab and testing services in May 2021.

5. How Is the Q & M’s Revenue Split Across Your Key Markets?

• We operate 87 dental clinics in Singapore, 37 in Malaysia and 1 in China. Through our associate company Aoxin Q & M, we have embarked on expanding in the northeastern part of China over the years, opening dental hospitals with more than 100 over dental chairs.

• Although Aoxin has been loss making in the last few years, due to COVID-19 and gestation losses from opening 2 new hospitals in Panjing and Daliang, improvements are being observed this year. The net loss for 1Q2021 is RMB 4.7 million, however, it has decreased to RMB 1.5 million in 2Q2021. Bearing unforeseen circumstances, the Group is cautiously optimistic on the dental industry in China.

• We are closely monitoring the COVID-19 situation in Malaysia and will evaluate the opening of new clinics until the vaccination rate increases and the rate of infection decreases.

6. Q & M recently declared a bonus for its shareholders. Could you share with us the rationale behind your release of the bonus and elaborate more on this policy?

• The Proposed Bonus Issue increases the issued share capital base of the Company reflecting the growth and expansion of its business. It is also to reward and recognise shareholders for their loyalty and continuing support for the Company. Management believes that it will increase the accessibility of investing in the Company to more investors, thereby increasing trading liquidity and greater participation across various investors. 9. Sustainability and ESG have increasingly been a key focus, how is Q & M committed to sustainability?

7. What are some notable developments that shareholders can look out for or expect in the near to medium term?

• In Singapore, we have initiated a strategy of intensive organic growth in our dental clinics. We will expand our team of dentists to support the future growth of our operations in Singapore. To maintain our current position as the leading private dental healthcare group in Asia, we will continue to seek opportunities to venture into new markets in ASEAN countries.

• We will continue to develop, invest and optimise our digital AI ethical enhanced guided treatment plan to provide the most effective and suitable treatment plans for patients. We believe that we are well-positioned to cater to the rising demand for primary and higher value specialist dental healthcare services to our customers.

8. Does Q & M Have Any Plans in Place to Expand Your Reach in the Existing Markets?

• We have added 10 new clinics to our network in this year-to-date. Aside from that, we have also secured locationsto open 6 new dental clinics island wide and are expected to commence operations by 4Q2021.

• The Group intends to open 30 dental clinics in Singapore and Malaysia each year after 2021. The eventual number of dental outlets will depend on available opportunities, pertinent market conditions and the evolving COVID-19 situation.

• Our dentists and staff have supported the Group during the challenging environment. We believe that any future expansion and growth in our core dental business will also leverage on this proven formula.

9. Sustainability and ESG have increasingly been a key focus, how is Q & M committed to sustainability?

• Our formula for building a sustainable business is guided by our philosophy of 修身齐家治国平天下, which places focus first on the continuous improvement of ourselves and our mindsets, and thereafter collectively aligning our Q & M family to one greater purpose – that is towards the goal of treating all patients well through dentistry.

• Q & M emphasises on creating organic growth in Singapore and through overseas expansions, with responsible and ethical practices from both the clinicians and our staff. With that, we strive to provide better services for our patients.

• Q & M will also focus on improving the efficiency and productivity of our COVID-19 testing capacity through automation as the nation moves towards endemic management. Q & M College of Dentistry has also provided courses for swabbing operation and equipping individuals with knowledge of proper infection control according to Ministry of Health’s protocol. We are also seeing new opportunities to further support the fight against COVID-19 through vaccination services.

10. Why Should Investors Take a Closer Look at Q & M? Notes

• The Group is pursuing organic growth through mergers and acquisitions in Southeast Asia and China, the setting up of new clinics in Malaysia and China, and strengthening our dentist recruitment programme.

• Through AI in Dentistry, we aim to provide most effective treatment plans for patients and in return increase the Group’s long-term value proposition.

• New ventures such as the sale of COVID-19 test kits, laboratory tests, swabbing and the sale of masks and PPE.

• Q & M Group has a dividend policy of at least 30% of our core operating profits. Management is also projecting healthy financial growth and has maintained a strong balance sheet and cash position.

10 in 10 – 10 Questions in 10 Minutes with SGX-listed companies

Designed to be a short read, 10 in 10 provides insights into SGX-listed companies through a series of 10 Q&As with management. Through these Q&As, management will discuss current business objectives, key revenue drivers as well as the industry landscape. Expect to find wide-ranging topics that go beyond usual company financials. This report contains factual commentary from the company’s management and is based on publicly announced information from the company. For more, visit sgx.com/research. For company information, visit www.qandm.com.sg Click here for 2Q2021 Financial Announcements