KGI Research Singapore

Singapore's leading broker offering Futures, FX, Equities and Wealth Management.

Q & M Dental Group (QNM SP)

Company Update: Updated 30 May 2024

Focusing on Organic Growth

• Focusing on organic growth. Amidst a saturated dental market in Singapore, Q & M Dental Group is shifting its stance to focusing on organic growth to increase the efficiency and effectiveness of its business process in each clinic. The company has rolled out several new technological initiatives, such as a new dental mobile application and the integration of new dental technologies.
• Integration of new technology. Q & M Dental Group recently announced the integration of Align Technology’s latest iTero Lumina Intraoral Scanner across its dental clinics in Singapore. The iTero Lumina intraoral scanner will be deployed over the next 12 months in phases across their clinics in Singapore.
• Increasing investments in dental AI. Recently, Q & M Dental Group announced that it has entered into a JV agreement with EM2AI Professional HoldCo Pte. Ltd and its 49%-owned subsidiary, EM2AI Pte. Ltd. EM2AI Professional HoldCo Ptd. Ltd. has also agreed to provide an interest-free loan of S$3,701,663 to EM2AI. This JV agreement brings about more capital to be invested into more AI capabilities to drive growth for the company.
• We initiate with an OUTPERFORM recommendation and a 12-m target price (TP) of S$0.35.

FY2023 financial results.

The company reported a revenue of S$182.7mn in FY2023, a marginal increase of 0.8% YoY, compared to S$181.2mn in FY2022, with higher revenue contribution from Singapore dental and medical clinics offsetting a lower revenue contribution by Malaysian clinics due to foreign exchange losses. Core Healthcare Business revenue increased by 2.4% to S$176.2mn in FY2023, compared to S$172.1mn in FY2022. Profit after tax declined by 6.6% YoY to S$11.1mn, compared to S$11.9mn in FY2022.

Dominating market presence in Singapore.

With 106 dental clinics across Singapore, Q & M Dental Group boasts the most extensive network of dental clinics in Singapore, holding around 11.2% of the market share. The company positions itself as an affordable and convenient dental service provider, and this puts the company in a prime position to capture the majority of the demand for dental services in the Singapore market.

Valuation & Action

We initiate with an OUTPERFORM recommendation and a TP of S$0.35, based on a financial analysis using Discounted Cash Flow (DCF), with a terminal growth rate of 2% and a WACC of 8.3%. Q & M Dental Group’s resilient business, as well as its investment into dental AI & technology, positions the company well for future growth and capture the majority of dental services demand in the local market. The company’s stabilising margins post the COVID-19 pandemic also reaffirmed the company’s growth trajectory. Our TP of S$0.35 implies a 44.2% upside.


The company is exposed to currency translation risk as it operates its business in several key markets, Singapore, Malaysia, & China.

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