🚀 1-Min Stock Rundown

📌 Q & M Dental: Reorganisation + Valuation Shift Underway

📈 Core Dental Revenue Rises Modestly
Core dental business revenue increased by ~4% YoY in 1H FY25 to S$87.2–87.4 million, up from S$84.2 million in 1H FY24. This growth however was partly offset by a S$3 million drag from the cessation of its lab business in September 2024.

📉 Profitability Softens, But Some Beats
Adjusted PATMI (profit after tax and minority interest) rose ~4.7% year-on-year to S$8.3 million in 1H FY25. Though this meets some expectations, it represented only ~40%–47% of full year FY25 forecast, raising the bar for 2H.

💸 Elevated Valuation: P/E Expands Sharply
Share price has surged ~25% over the past month, and ~80% over the year. Combined with slower earnings growth, this push has driven the trailing P/E into the 50-plus times range. To justify current valuation, analysts expect strong earnings momentum ahead.

🔄 Strategic Moves: Clinic Footprint + China Exposure
Q & M is restructuring: closing loss-making clinics in Singapore, while opening new ones (8 opened, 4 closed in past 12 months). It is also raising its stake in Aoxin China, and reorganising cost structures there. Additionally, the company raised a S$130 million note to fuel acquisitions that are expected to be earnings accretive.

🏥 Subsidies, Government Policy & EM2AI Roll-out

In Singapore, upcoming increases in government subsidies for dental procedures are expected to bolster demand in 2H25. Meanwhile rollout of EM2AI (presumably AI / digital tools) across ~1,100 clinics is being flagged as another growth lever.

🤝 Returns on Capital & Competitive Position
Over the last five years, returns on capital have held around 9.8%. Q & M faces competition from other regional dental chains and clinics, but its diversified operations (Singapore, Malaysia, China) and ability to scale clinic footprint give it an edge. Peers in local healthcare have lower P/Es, meaning market is betting on Q & M’s turnaround and growth rather than status quo.

💡 Analyst Sentiment & Target Price Revision
Phillip Securities re-rated the stock up: target price lifted to S$0.545 (from ~S$0.40), on expectations that growth will improve in 2H25, driven by Singapore’s subsidy tailwinds, EM2AI deployment, and more disciplined clinic operations.

📈 Conclusion
Q & M Dental looks like a high-beta play in healthcare: its current valuation is ambitious but may be justified if reorganisations & China expansion pay off. Investors seeking outsized growth with risk appetite should watch 2H25 closely for revenue inflection, margin improvements, and execution on clinic closures/acquisitions.

Used by Execs at Google and OpenAI

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Cheers,

James -Dissecting-Stocks-in-1-min- Yeo