10 Questions for Quantum Healthcare

Company Overview

Quantum Healthcare (previously QT Vascular) specialises in the healthcare sector which includes: (i) the provision of dental services, (ii) research, development and manufacturing of medical equipment and products, and (iiI) provision of general and specialised medical care but not limited to the fields of aesthetics and wellness services.

1. For investors new to the company, what does Quantum Healthcare do?

• Quantum Healthcare is a healthcare company that strategically leverages our resources and experience in the specific fields of healthcare, from dental services, medical equipment, wellness services to research and development. Our recent internal restructuring and diversification into the healthcare business aims to bolster long-term growth of our 3 core business units:
• Healthcare Business
  • Provision of dental services, as well as operations management and consultancy services to certain government entities and/or corporate clients.
• Medical Equipment Business
  • Research, develop and design of medical equipment and other related products including but not limited to geriatric medical rehabilitation equipment and medical equipment for use in hospitals as well as for emergency and rescue (Medical Equipment); and
  • Engage in the trading, manufacturing, distributing and/or marketing of these Medical Equipment.

• Medical and Wellness Business

  • Provision of all-inclusive medical care that extends beyond the realms of aesthetics and wellness.

2. What are the key drivers behind restructuring into each of the 3 new business segments?

• Post restructuring into the 3 new business segments, the company, to a much lesser extent, continues to be engaged in the design, assembly and distribution of advanced therapeutic solutions for the minimally invasive treatment of complex vascular diseases.

• The 3 new core businesses provide the company with additional and recurrent revenue streams with a view to achieve long-term growth and reduce reliance on the existing vascular medical device business. We expect the Healthcare Business to provide for higher margins, the Medical Equipment Business to provide for higher revenue and more consistent cash flow generation and the Medical and Wellness Business to provide for long-term future growth potential.

• The company has also identified the following positive near-term outlook Revenue (S$’000) and prospects when considering the restructuring: (i) rising income and educational levels; (ii) increasing and ageing population; (iii) growth in medical tourism industry; (iv) strong governmental support on eldercare; (v) social acceptance of aesthetics medical treatments.
• Post pivoting into the healthcare business, Quantum Healthcare has seen revenue of around S$4.1 million for the 6 months ended 30 June 2022, a 100% increase as compared to the 6 months ended 30 June 2021. This was mainly contributed by the acquisition of Asia Dental Group and its subsidiaries on 13 Jan 2022.

3. Following the completion of the restructuring, what are some key considerations when it comes to investing in new business opportunities and partnerships in the future?

• Our future direction is to focus on our new businesses and be an ASEAN leader in the healthcare space across the 3 new core businesses, and to always keep a look out for good companies to acquire and grow the overall business. This will ensure greater ease and flexibility in positioning ourself to expand and/or divest existing business segments, explore investment opportunities, new businesses and business partnerships should any good opportunities arise.

• In the near term, our priority is to monitor and grow the dental healthcare business in Singapore whilst also keeping a look out for potential new strategic business acquisitions and partnerships. Key considerations for investment in new business opportunities and partnerships include, but not limited to the following:
  • business and profitability track record of the potential opportunity;
  • involvement of key management of the new potential business in the future; and
  • future outlook and growth potential of the new business opportunity and partnership.

4. How would you describe Quantum Healthcare’s competitive edge in the healthcare business?

• We foresee strong competition by healthcare companies in the region, However, we believe that with the broader scope of core business activities we have entered or intend to enter into, the Group will be well positioned to minimize its risks by not focusing solely in one particular segment of the healthcare market.

• In addition, we provide a multi-disciplinary and assessable dental healthcare through our diverse range of products and services and our management team specializes in identifying accretive acquisition opportunities, to provide good return to our shareholders.

• We place emphasis on a foundation for a superior and cutting-edge healthcare through our rigorous research and experimental development in medical science and biotechnology, which allows for our innovations to remain revolutionary and purposeful on the back of our desire for progressive evolvement in research & development.

5. Quantum Healthcare has been revenue generating since the acquisition of several dental clinics. Can you share more on these dental clinics?

• We currently own a total of 7 operating dental clinics in Singapore engaged in the provision of dental healthcare related services. Recent acquisitions in HY2022 includes Asia Dental Group Pte Ltd. and its subsidiaries.

• On 31 March 2022, Quantum Healthcare completed the acquisition of 3 Eastern Dental Surgery clinics for a total of S$1.3million. The three clinics are namely the branches at Jurong West, Bukit Batok and Jurong East.

• We also own a research and development focused entity, Kairogenix Pte. Ltd., involved in the research and experimental development on medical science and biotechnology.

6. What are the different types of dental care and treatments Quantum Healthcare provide?

• We aim to be one of the major players in the local private dental healthcare space through acquisitions to grow our number of dental clinics in Singapore. With a team of passionate and experienced dentists, coupled with total access to a broad range of products and services, we aim to provide a multi-disciplinary and accessible dental healthcare for all our patients in areas such as:
  • Aesthetic Dentistry – Denture fittings, crowns and bridges, implants, bonding veneers, and teeth whitening
  • Orthodontics – Fixed and removable braces
  • Implant Dentistry – Multi-purpose treatment to replace the roots of missing tooths, denture wear
  • Preventive & Restorative Dentistry – Dental check-ups, gum disease and laser treatment
  • Pediatric Dentistry – Oral healthcare services for children and teenagers under 18
  • Advisory & Consultancy Services – Dental management solutions through evidence-based proven methods

7. How will you maintain and uphold product and corporate governance, which is crucial to the healthcare industry?

• We always had and will continue to prioritise the quality of our products and services, uphold strong business ethics and maintain zero non-compliance in regulations, as the Group continues to operate in the healthcare industry.

• These factors remain pertinent for the Quantum Healthcare to maintain and adhere to high standards of products and services offered to our clients.

8. What are some potential risks ahead and how is the company managing them?

• In the near term, the following risks may arise which can affect Quantum Healthcare’s financial performance:
  • ability to continue obtaining financing (through equity/bank loans) to support the Group’s overall growth;
  • increasing operational costs which will have an impact on overall profitability of company’s healthcare business; and
  • slowdown in the global economy arising from COVID-19 and the Russia-Ukraine war which negatively affects overall business sentiments in the market.
• To manage these risks, we intend to:
  • maintain and build existing and new banking relationships with financial institutions;
  • tap on the Singapore government’s new budget measures such as the “Enterprise Financing Scheme” and “Temporary Bridging Loan Programme” for the purpose of mergers and acquisitions and working capital respectively; and
  • maintain a Board of Directors with diversified skills and industry experience and streamline the Group’s operations for potential cost savings in the long-term.

9. What value proposition does Quantum Healthcare offer to its shareholders and potential investors? What do you think investors may have overlooked about it?

• With a new management in place and the diversified nature of our new core businesses, Quantum Healthcare is well positioned to tap on the new business opportunities and growth potential that they bring.

• In addition, Quantum Healthcare’s key management team are also substantial shareholders of the company, proving their long-term commitment for future growth and profitability of the Group. It is the strategic goal of the management to translate these commitments towards generating sufficient cashflows for dividends to shareholders in the long term.

10. Should investors be concerned or optimistic about the new restructuring?

• We believe that our investors should be optimistic about the restructuring of the Company to the 3 new core businesses as it will allow the Company to:
  • reduce its reliance on a single core business;
  • tap on new business opportunities to grow the Company’s revenue and profitability in the long-term; and
  • enables management and the Board to be able to monitor the growth of each core business more effectively.

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.