Q&M Dental Group (S) rated 'increase exposure' by SIAS

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 1.00

SIAS Research in a Mar 1 research report says: "Revenue grew to $47.8 million as the total number of clinics in Singapore and Malaysia increased to 52 in FY2011 from 44 in FY2010.

"Meanwhile, PATMI only grew 14%, to $4.6 million in FY2011 and beat our forecast by 2.6%. Lower PATMI growth was mainly due to higher employee benefits in FY2011. We expect core-operating margin to recover in FY2013F as the company passes on the cost increase.

"With an aging population in Singapore over the next 20 years, Q&M will be able to capture long-term market growth through its strong brand name. Besides, Q&M also made some progress in overseas expansion in FY2011. Intrinsic value of $1. MAINTAIN INCREASE EXPOSURE."

Q&M Dental Group (S) rated 'increase exposure' by SIAS

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 1.00

SIAS Research in a Sept 16 research report says: "On the Singapore front, the company expects more Singaporean patients to visit its clinics as the Primary Care Partnership Scheme (PCPS) reaches out to more than 700,000 people.

"The entity is also considering growing organically via setting up its own clinics in one of the China cities - this may help to boost profitability further but we have yet to include it into our valuation. Q&M also intends to expand its operations in Malaysia, albeit at a much slower pace as China will continue to be their priority.

"We like Q&M for its defensive nature and steady business model. The company's share price demonstrated that by falling only 3.7% since June 1 as compared to FSSTI's 13.3% drop. Intrinsic value of $1. MAINTAIN INCREASE EXPOSURE."

Q&M Dental Group (Singapore) rated 'increase exposure' by SIAS Research

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 1.00

SIAS Research in an Aug 15 research report says: "Q&M's 2Q FY11 revenue and PATMI rose 22% and 12% y-o-y to $11.2 million and $1.4 million respectively, largely in line with expectation.

"The company continued to expand in China and signed non-binding agreements with Beijing Le Le Jia and Shanxi Meiyuan Medical Technology over the last three months. To date, Q&M had four pending deals in China and the entities are capable of generating approximately RMB40-50 million annually, more than half way mark to achieving their combined target profit of RMB80 million for the China joint ventures.

"We are lowering our FY2011F and FY2012F so as to account for the "delayed" income for the China associates. Q&M also declared 0.6 cents dividend per share for 1H FY2011. Intrinsic value of $1.00. MAINTAIN INCREASE EXPOSURE."

SIN: CIMB TraderAM - Q&M Dental Group

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.98

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD

Research House: CIMB

Price Call: BUY

Target Price: 3.88

Stock Name: TCT
Company Name: TREASURY CHINA TRUST

Research House: CIMB

Price Call: BUY

Target Price: 3.38

15 June 2011 / Singapore

Trades of the Day...

Fundamentally:

When was the last time you saw your dentist?- Not yesterday at our Corporate Focus Series Lunch Talk we hope. Well, even if it was, the dentists at Q&M (QNM SP; S$0.83, BUY, TP S$0.98)had good news for you. China expansion remains on track and IFC recently gave QNM its vote of confidence by taking a stake in the dental Group.

What's Relevant...

Singapore's lack of market moving newsflow in saw the STI ending just 1.65 points lower yesterday. Top 20 actives saw familiar names, Genting Singapore, Golden Agri, Cosco Corp and Dyna-Mac.Technically, the chart suggests that the index could push higher towards 3,180 though low trading volumes are a negative. No reason for the STI not to open higher given the positive close on the US markets overnight.

Corporate News...

STX OSV. Faster-than-expected improvements in North Sea demand reaffirm our belief in a stronger order momentum for STX OSV in 2H11. Longer-term, STX OSV's growth is underpinned by booming Brazil demand. Take note that the North Sea rebound is not merely seasonal. It signals a sustained recovery. Our FY11 order target of NOK10bn (excluding Transpetro orders) has a high chance of being achieved. OUTPERFORM, Target Price S$1.70, based on 11x CY12 P/E (15% discount to rigbuilders' 5-year mean). ST Engineering has secured four AHTS orders worth S$171m from Swire Pacific. Vessels are expected to be delivered progressively from 1H13 to 1H14. Judging from the contract prices, we believe that the AHTS are of 12,000 bhp or in the medium class range. This order may seem surprising given that this asset class remains plagued by oversupply. However, we note that the medium class of AHTS consist only 3% of global AHTS fleet and is not as overcrowded as the smaller classes. Although a recovery in aviation MRO spending has somewhat been blunted by macro issues (Europe debt contagion, U.S growth concerns), we remain optimistic about a gradual recovery. Stronger quarters ahead and a pick-up in Aerospace could catalyse the stock. OUTPERFORM, Target Price S$3.88. Empty vessels make the loudest noise.Well, you'll sure be glad that Treasury China Trust is not one. The Company has been showing its confidence in its own business with unit buy backs recently. The latest was yesterday with 78,000 units bought back at S$2.00 per unit. So far, the Company has bought back 1.04% of its issued units. BUY, Target Price S$3.38.

SIN: CIMB TraderAM - Dukang Distillers

Stock Name: Serial
Company Name: SERIAL SYSTEM LTD

Research House: CIMB

Price Call: BUY

Target Price: 0.24

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.98

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD

Research House: CIMB

Price Call: BUY

Target Price: 3.88

14 June 2011 / Singapore

Trades of the Day...

Fundamentally:

Dukang Distillers Holdings Ltd (DKNG SP; S$0.56) - We visited Dukang's plant in China last week. We like Dukang for its (i) strategic initiatives (ii) strong industry traction (iii) attractive valuation with a lower CY11 P/E of 19.1x relative to its peer average of 23.4x (iv) strong net cash position of RMB587.7m. Growth catalyst to stem from the (i) introduction of new products (ii) penetration into new geographic regions (iii) development of the Dukang village which will increase the visibility of its brand (iv) optimization of utilization rate at the Dukang plant.

What's Relevant...

Singapore shares closed weaker on Monday with the blue-chip STI down 19.3pts (0.6%) to 3,059. Decliners outnumbered advancers 4 to 1 in a volume of 1bn shares worth $1.2bn. Following S&P's downgrade of Greece by three notches and warned of a potential default, we expect the STI to fall at open. We would avoid O&M counters like Keppel Corp and SembMarine this morning after US energy plays faltered in overnight trade after a drop in oil prices.

Corporate News...

Low Keng Huat. 1Q11's net profit of S$21.6m was up 14% yoy, despite a 56% yoy decline in revenue to S$40m. Construction revenue fell 64% to S$27m after the completion of NEX at Serangoon central mall, while turnover for hotel & F&B businesses decreased 5.5% to S$12m. Serial System announced that its 91% owned Hong Kong subsidiary, Serial Microelectronics (HK) has been appointed as a distributor for Greater China and Taiwan by Fingerprint Cards AB (FPC). Serial is FPC's 2nd distributor appointed for the Greater China and Taiwan market. We have a BUY call on the stock with a TP of S$0.24. Q&M Dental has entered into another joint venture arrangement with a new Chinese partner. It signed a non-binding memorandum of understanding with the shareholders of Beijing Le Le Jia Medical Solutions (LLJ) where LLJ shareholders shall transfer 49% of their shares to Q&M China for RMB25m (S$4.8m). Maintain BUY, TP S$0.98. ST Engineering has received a letter of claim by lawyers of Louis Dreyfus Armateurs (LDA) in respect of shipbuilding contract for the Roll-on/Roll-off Passenger ferry contracted in Jul 07 for S$179m. LDA is claiming for both liquidated (S$4.8m) and unliquidated (approx Euro33m) damages from ST Marine's purported breach. ST Marine is taking legal advice on the claim which it intends to dispute. Maintain OUTPERFORM, TP S$3.88. Yongnam's contract wins had picked up strongly in 2Q11, with the group securing more than S$190m worth of contracts or 40% of our target for this year. Coupled with profit margins which had been sustained over the four quarters of 2010 (with a positive surprise in 1Q11), we believe YNH is on track to meet our FY11 earnings target. Maintain OUTPERFORM, TP S$0.40.

Q&M Dental Group (S) rated 'increase exposure' by SIAS

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED
Research House: SIAS

SIAS Research in an April 28 research report says: "Q&M Dental Group (Singapore) Ltd (Q&M) announced the entry of International Finance Corporation (IFC) as a strategic investor of the Group.

"IFC is a heavyweight investor and we believe that their presence is likely to upgrade the company's profile and stir the interest of other institutional investors. Accordingly, IFC will provide a US$10 million senior loan and a US$5 million convertible loan to the company. The latter is convertible at a price of 69 cents per share and both loans are subjected to an interest rate of LIBOR + 2.8%.

"Assuming that the convertible loan is fully converted, approximately 9.13m shares will be issued. We have factored in the potential dilution effect into our forecasts, given that our intrinsic value is higher than the conversion price. Intrinsic value of 85 cents. INCREASE EXPOSURE."

Q&M Dental - Q&M Dental Group rated 'buy' by CIMB

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED
Research House: CIMB

CIMB in a Jan 24 research report says: "Q&M is in a sweet spot with 37 clinics and two Dental Centres island-wide to tap the population's dentistry needs, while its two Dental Centres yield higher revenue intensity.

"Investors have over the last six months taken over two healthcare groups (Parkway and Thomson Medical) at high premiums. Like Q&M, these names have strong brand equities, solid patient volumes, revenue & cash flows, and overseas ventures.

"Target price of 83 cents, based sum-of-the-parts valuation. Q&M offers investors value at 15x CY12 P/E (cheaper than peers) against our 3-year core earnings CAGR forecast of 30%. We like it for its strong recurring earnings in the domestic market and international expansion plans. BUY (initiating coverage)."

Q&M Dental - Stocks-up on bargain hunting at midday, Golden Agri leads gains

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED
Research House: CIMB

Singapore shares were 0.47% higher at Monday’s midday break, in line with other Asian bourses as investors bought back shares after last week’s sell-off. Palm oil firm Golden Agri-Resources (GAGR.SI) rose in active trading.



As the lunch break, the Straits Times Index (STI) <.FTSTI> was up 14.89 points at 3,199.49. The total value of shares traded in the morning session was $562.1 million, down from $789.8 million on Friday.

"The STI is rebounding after being oversold in several bad days of trading last week, and investors are buying back some of their short positions," said Carey Wong, an investment analyst at OCBC Investment Research.

 

Wong said he expects the STI to consolidate in the in 3,180-3,220 range this afternoon, and to trade sideways this week ahead of the U.S. Federal Open Market Committee’s meeting and weekly jobless claims data.  

Golden Agri-Resources jumped as much as 4.2% on Monday as palm oil futures rose, boosted by expectations of tight supply and stronger demand, traders said.

As of midday, Golden Agri shares were up 3.5% at $0.735 with over 55.1 million shares changing hands.

Malaysian palm oil futures rose to a near two-week high on Friday as traders cited strong export data amid concern that supplies will struggle to keep pace with robust demand.

“Palm oil stocks are likely to continue inching upwards as palm oil prices are pretty stable, and demand for crude palm oil typically rises nearer to the Chinese New Year holiday because of the festivities,” said Wong.  

Palm oil firm First Resources (FRLD.SI) also rose 1.4% to $1.43 with over 4.5 million shares traded.

Shares of Singapore dental firm Q&M Dental Group (QMDT.SI) rose 4.7% to $0.56 after CIMB initiated coverage of the firm with a “buy” rating. 

CIMB said it expects Q&M’s core earnings to grow by 30% per annum on average over the next three years, and set a target price of $0.83.

Q&M Dental - CIMB starts Q&M Dental at Buy; $0.83 target

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED
Research House: CIMB

CIMB initiates Q&M Dental (JW8.SG) at Buy with a $0.83 SOTP-based target price. “Q&M offers investors value at 15X CY12 P/E (cheaper than peers) against our 3-year core earnings CAGR forecast of 30%. We like it for its strong recurring earnings in the domestic market and international expansion plans.” 

It says catalysts could include the opening of more clinics, higher charges, expansion through M&A, JVs and/or strategic alliances and a potential listing of its overseas dental business. 

It notes, dentistry has one of the most lucrative revenue intensity in healthcare business, dental expenditure is necessary, and dental charges are not the lowest of all healthcare consumption. 

“Q&M is in a sweet spot with 37 clinics and two Dental Centres island-wide to tap the population’s dentistry needs, while its two Dental Centres yield higher revenue intensity.” 

Shares are +4.7% at $0.560.