QNM SP / QC7.SI
Growth through appropriate care and disciplined expansion
Healthcare
1H26 revenue rose 12.5% to S$99.5m and core dental profit after tax increased 9.8% to S$15.0m. Reported PATMI grew 27% to S$4.9m, helped by a favourable other-gains comparison and lower tax. Cash conversion remains a key test.
Our patient and treatment model links ageing, extraction eligibility, informed patient choice and dentist training. Singapore clinic sales reach S$183.2m in FY27, with implant revenue of S$29.8m. Historical treatment volumes and mix are model estimates.
Australia and Thailand now have signed SPAs; three other acquisitions remain at MOU stage. The base assumes eventual completion but allows operating shortfalls and recognises no cash or profit from prospective guarantee recovery.
We reiterate OUTPERFORM. Our base target uses 8.0% WACC and 2.0% terminal growth, implying 36.0% price upside from S$0.505. We remain at S$0.687 while the conditions for the higher scenario are unproven.
Key downside risks include acquisition delays or weak operating delivery, uncertain guarantee recovery, higher funding costs, minority-value leakage, and slower clinically appropriate implant uptake could reduce value.
