Monday, September 30, 2013

Maybank KE Report 1 Oct 13

Singapore Daily                                                         
                                                                           
  Q & M: A Gem In More Ways Than One; Initiate Buy, $0.305 - TP $0.41     
  QNM SP | Mkt Cap USD147m | ADTV USD0.2m                                 
                                                                           
  Ø  Q&M is the rarest gem in the global dental sector – the               
  best-performing by margins, ROE and growth in a sector where only four   
  listed peers can be found but the cheapest. At 34x FY14F forecast, we   
  believe it is still undervalued now ahead of organic profits from new   
  dental outlets in its 3 key markets and new revenue stream from medical 
  clinics in Singapore.                                                   
  Ø  Q&M has proposed to acquire two dental groups in China, its largest   
  acquisitions to-date. If completed, we expect it to boost FY14 earnings 
  and our target price by 39%. Dental businesses in China have shown far   
  more earnings growth and margin potential.                               
  Ø  Q&M has plans to unlock the value of its China operations via an IPO 
  in future, but already private equity firms have sniffed the investment 
  potential. Kunwu Jiuding’s proposed purchase of a 20% stake for RMB200m 
  places a value of RMB1b (SGD200m) on Q&M’s China operation, higher than 
  Q&M’s entire market cap in Singapore.                                   
  Click here for full report                                               
  johncheong@maybank-ke.com.sg   

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