Q&M Dental Group Ltd (QNM SP): Streamlining business operations
BUY Entry – 0.285 Target– 0.310 Stop Loss – 0.270
Q & M Dental Group (Singapore) Limited operates dental clinics. The Company offers aesthetic, children’s and general dentistry; fits crowns, dentures and braces; and offers bleeding gum treatment, gum surgery and oral surgery; and treats snoring and teeth grinding.
Increased Profitability Outlook. The company reported a strong improvement in profitability, with net profit margin (NPM) rising by 18.0% to S$13.1 million in FY24. This was driven by cost-cutting initiatives, including the closure of underperforming clinics and the winding down of its medical laboratory business in September 2024 following the decline of COVID-related operations. Several expense categories declined year-over-year, reflecting the company’s effective streamlining efforts. We expect these efficiency gains to sustain profitability into the next financial year.
Expansion into New Markets with Additional AI Licenses. EM2AI has obtained regulatory licenses to sell and distribute its dental AI solutions in Thailand, the Philippines, Vietnam, and Indonesia, expanding beyond its existing presence in Singapore and Malaysia. These approvals enable EM2AI to broaden its market reach and capitalize on the growing demand for AI-driven dental solutions across Southeast Asia.
Strategic Partnership to Scale Regional Presence. Following its recent licensing approvals, EM2AI has actively pursued partnerships to accelerate market expansion. The company has signed a Memorandum of Understanding (MoU) with an established regional dental solutions provider, granting the partner a license to integrate EM2AI’s technology into its platform. This collaboration aligns with the company’s strategy to expand its business network and solidify its footprint in key regional markets. As a result, EM2AI is now set to provide its dental AI solutions to over 1,100 clinics across Singapore, Malaysia, Thailand, and Vietnam, reinforcing its growth trajectory and long-term value creation for shareholders.
FY24 financial results. Q & M Dental Group reported revenue of S$180.7mn for FY24, a 1.1% decline YoY, compared to S$182.7mn in FY23, mainly due to the cessation of the Group’s medical laboratory business. PATMI rose by 27.1% YoY to S$14.6mn in FY24, compared with S$11.5mn in FY23. EPS rose to 1.55 Singapore cents in FY24, compared to 1.22 Singapore cents in FY23. The Group also announced plans to carry out a share buyback of up to 50mn ordinary shares.
We have fundamental coverage with a BUY recommendation and a TP of S$0.35. Please read the full report here.
Market consensus
(Source: Bloomberg)
Sasseur REIT (SASSR SP): REIT-vitalisation of China’s economy
Sasseur Real Estate Investment Trust operates as a real estate investment trust. The Company invests in a diversified portfolio of retail real estate assets. Sasseur Real Estate Investment Trust serves customers in Asia.
Record high portfolio occupancy and resilient leasing demand. Sasseur REIT achieved a record-high occupancy rate of 98.9% in 4Q24, demonstrating strong tenant demand and effective asset management. While 2H24 outlet sales in RMB declined 3.9% YoY, the REIT has continued optimizing its tenant mix to sustain footfall and enhance rental revenue.
Strategic asset enhancements driving value. Recent asset enhancement initiatives (AEIs) at the Kunming and Hefei outlets, including improving retail layouts and adding parking spaces, have enhanced the shopping experience and increased foot traffic. Plans to install energy-efficient air-conditioning systems at the Chongqing Liangjiang Outlet between 2025-2027 are expected to improve operational efficiency and cost savings.
Favourable market positioning in China’s outlet mall industry. China’s recent fiscal stimulus measures, including the expansion of consumer trade-in schemes and increased government spending, aim to bolster domestic consumption and economic growth. These initiatives are expected to enhance consumer purchasing power, potentially leading to increased retail sales. For Sasseur REIT, which operates retail outlet malls in China, such measures could translate into higher foot traffic and sales, thereby positively impacting rental income and overall financial performance. However, the actual benefits will depend on the effective implementation of these policies and the broader economic environment.
2H24 financial results. Sasseur REIT’s EMA rental income remained stable at RMB 335.1 million, reflecting 0.8% YoY growth despite macroeconomic headwinds. In SGD terms, EMA rental income stood at S$62.2 million, with a slight 0.3% YoY decline due to unfavorable foreign exchange rates. Distributable income per unit (DPU) for 2H24 rose by 0.1% YoY to 2.929 Scts, primarily supported by the resilient EMA rental income.
We have fundamental coverage with a BUY recommendation and a TP of S$0.90. Please read the full report here.
Market consensus
(Source: Bloomberg)
Hong Kong Exchanges and Clearing Ltd. (388 HK): Expecting increased trading activities
BUY Entry – 350 Target – 390 Stop Loss – 330
Hong Kong Exchanges and Clearing Limited (HKEX) is principally engaged in the operation of stock exchanges. The Company operates through five business segments. The Cash segment includes various equity products traded on the Cash Market platforms, the Shanghai Stock Exchange and the Shenzhen Stock Exchange. The Equity and Financial Derivatives segment includes derivatives products traded on Hong Kong Futures Exchange Limited (HKFE) and the Stock Exchange of Hong Kong Limited (SEHK) and other related activities. The Commodities segment includes the operations of the London Metal Exchange (LME). The Clearing segment includes the operations of various clearing houses, such as Hong Kong Securities Clearing Company Limited, the SEHK Options Clearing House Limited, HKFE Clearing Corporation Limited, over the counter (OTC) Clearing Hong Kong Limited and LME Clear Limited. The Platform and Infrastructure segment provides users with access to the platform and infrastructure of the Company.
Major IPO to Boost Trading Activity. Contemporary Amperex Technology Limited (CATL), the world’s largest EV battery producer, has received regulatory approval to launch its first share offering in Hong Kong. While CATL has yet to disclose pricing, its filing indicates plans to sell up to 220.17 million shares. Media reports suggest the IPO could raise at least US$5 billion, making it Hong Kong’s largest since Kuaishou Technology’s US$6.2 billion offering in January 2021. This landmark listing is set to revitalize HKEX’s IPO market, drive increased trading activity, and support higher trading revenues.
Supportive Monetary Policy. People’s Bank of China (PBOC) Deputy Governor Zou Lan recently reaffirmed that China’s monetary policy remains accommodative and relatively loose. With potential interest rate and reserve requirement ratio (RRR) cuts on the horizon, liquidity conditions are expected to improve. A supportive monetary environment would benefit HKEX by lowering financing costs, stimulating economic activity, and strengthening investor confidence—all of which could lead to higher trading volumes and an uptick in new listings.
Launch of Single Stock Leveraged Products. HKEX has introduced Single Stock Leveraged and Inverse (L&I) Products, becoming the first exchange in Asia to list such instruments. Developed in partnership with CSOP Asset Management, these products offer +2x leveraged and -2x inverse exposure to highly liquid overseas stocks, including Tesla, NVIDIA, Coinbase, Berkshire Hathaway, and MicroStrategy. This expansion provides investors with new tactical tools for risk management and short-term trading strategies. The launch is expected to attract active traders and institutional investors, further broadening market depth and enhancing HKEX’s role as a global financial hub.
FY24 results review. Revenue increased by 12.3% YoY to HK$17.3bn in FY24, compared with HK$15.4bn in FY23. Net profit increased by 9.8% to HK$13.2bn in FY24, compared to HK$12.0bn in FY23. Basic EPS increased to HK$10.32 in Fy24, compared to HK$9.37 in FY23.
Market consensus.
(Source: Bloomberg)
PICC Property and Casualty Co Ltd. (2328 HK): Benefitting from strong EV sales
PICC Property and Casualty Co Ltd is a China-based company mainly engaged in property and casualty insurance business. The Company operates its businesses through six segments. The Motor Vehicle segment provides insurance products covering motor vehicles. The Accidental Injury and Health segment provides insurance products covering accidental injuries and medical expenses. The Agriculture segment provides insurance products covering agriculture business. The Liability segment provides insurance products covering policyholders’ liabilities. The Commercial Property segment provides insurance products covering commercial properties. The Others segment mainly represents insurance products related to cargo, credit and surety, household property, special risks, marine hull and construction. The Company mainly conducts its businesses in the domestic market.
EV Sales Growth Driving Auto Insurance Demand. China’s EV market saw strong momentum in February, accounting for nearly three-quarters of the 1.2 million EVs and hybrids sold globally. Despite rising import barriers in Europe and the U.S. to curb the dominance of Chinese automakers, China’s battery EV sales surged 46%, driven by new model launches from BYD, Xiaomi, Xpeng, and Zeekr. As more consumers shift away from petrol-electric hybrids in favor of full EVs, demand for auto insurance is expected to rise, benefiting insurers like PICC Property and Casualty.
Expanding Auto Insurance in Hong Kong. Earlier this year, PICC Property and Casualty, alongside two other Chinese insurers, signed a Memorandum of Understanding (MoU) under the Green Action Global initiative to expand the auto insurance market in Hong Kong. The partnership aims to leverage shared resources, technical expertise, and industry experience to support the growth of insurance products tailored for Chinese new energy vehicles in the region.
Strategic Partnership for Medical Insurance. PICC Property and Casualty has also entered into a strategic partnership with Zhibao Technology Inc. and Munich Re Beijing to introduce a next-generation private medical insurance product in China. The collaboration focuses on providing Chinese consumers access to high-quality medical services beyond the scope of public insurance. By combining the strengths of all three partners, the initiative aims to offer a comprehensive and innovative solution tailored to China’s growing middle class. The first product under this partnership is expected to launch in the coming months.
9M24 results review. Operating income increased by 7.9% YoY to RMB392.3bn in 9M24, compared with RMB363.4bn in 9M23. Net profit increased by 38.0% to RMB26.8bn in 9M24, compared to RMB19.4bn in 9M23.
DoorDash, Inc. provides restaurant food delivery services. The Company develops technology to connect customers with merchants through an on-demand food delivery application. DoorDash serves customers in the United States.
Scale-back in consumption favours food delivery services. There are signs that Trump’s aggressive tariff policies and the government downsizing actions are resulting in an economic slowdown or stagflation. February retail sales missed estimates, and March consumer sentiment plunged to the lowest since November 2022. US consumers are gradually scaling back their spending amidst rising economic uncertainties. The expensive tips on restaurant services continue to be a tailwind for food delivery, as the flat rate of delivery services ranges from US$3 to US$5. Consumers are inclined to opt for food deliveries compared to on-site eat-in.
America’s leading food delivery platform. In 2024, DoorDash ranks first in the U.S. food delivery platform market in terms of gross merchandise volume, with a share of approximately 67%.
Expand delivery services and promising user growth. DoorDash has gradually expanded its business scope, not only limited to catering, but also including grocery delivery, alcohol delivery, etc., to further meet the diverse needs of users. In 2024, DashPass subscription surpassed 18mn members, and monthly active users reached an all-time high of more than 42mn, up from 37mn in 2023.
4Q24 results. Revenue increased 26.1% YoY to US$2.9bn, exceeding expectations by US$50mn. GAAP EPS were $0.33. In 2024, total gross order value (GOV) grew by 21% YoY to US$21.3bn. Management estimated 1Q25 GOV to be US$22.6bn.
SAP SE is a multinational software company. The Company develops business software, including e-business and enterprise management software, consults on organizational usage of its applications software, and provides training services. SAP markets its products and services worldwide.
Improving automation process. SAP SE announced new generative AI features and an expanded partnership with American Express at SAP Concur Fusion. Joule, SAP’s AI copilot, will be integrated into Concur solutions to automate travel and expense management. Additionally, SAP Concur and American Express introduced real-time authorization data for corporate card transactions. SAP Concur remains the market leader in travel and expense management, with further integrations planned with Mastercard and American Express Global Business Travel. By deepening partnerships with financial services providers and expanding automation capabilities, SAP aims to enhance user experience, drive compliance, and improve cost efficiencies for businesses. Future developments in AI-powered expense processing and travel planning will likely strengthen its competitive advantage and customer adoption.
Capital inflow. Rising capital inflows into European markets, driven by Germany’s fiscal stimulus and increased defence spending, are fuelling a shift from US to European equities. With 60% of investors expecting stronger European growth, sectors like financials, industrials, and small caps are gaining momentum, with Germany as the preferred market. As Europe’s economy strengthens, businesses will accelerate digital transformation. SAP, as the region’s leading enterprise software provider, is well-positioned to capitalize on increased corporate investment in technology and cloud-based solutions.
4Q24 results. Revenue rose 10.7% YoY to €9.38 billion, beating expectations by €240 million. Non-GAAP earnings per share were €1.40, missing expectations by €0.05. The company declared dividend of €2.35/share annual dividend, 6.8% increase from prior dividend of €2.20/share, payable on 16 May.
Trading Dashboard Update: Add Jiangxi Copper Co Ltd. (358 HK) at HK$14.0, PICC Property & Casualty Co Ltd. (2328 HK) at HK$14.5. Cut loss on Nebius Group NV (NBIS US) at US$24.0.
