Q&M Dental Group (Singapore) Limited Proposing More IPOs

The dental outfit, Q & M Dental Group (Singapore) Limited (SGX: QC7) has been quite busy recently. With its plan to spin-off its manufacturing business in China and its newest acquisition of TP Dental Surgeons Pte. Ltd., the company is far from slowing down.

The company recently announced that it will also be exploring a spin-off of its dental business in China and Malaysia. Q & M Dental Holdings (China) Pte Ltd and Q & M Dental Group (Malaysia) Sdn Bhd are both looking for a possible listing on a reputable stock exchange.

According to the company, with a listing of both these companies, the value of its Dental Healthcare Business would be better reflected and the new source of funding would be critical for both companies to pursue their own expansion plan in their respective countries.

Q & M Dental Group (Malaysia) currently has 8 associate clinics operating in Malaysia with 6 of them operating under the Q & M brand. 4 of the clinics are in Johor, 2 in Selangor, 1 in Melaka and 1 in the capital of Malaysia, Kuala Lumpur. Q & M Dental Holdings (China) Pte Ltd is made up of 4 group of dental clinics and hospital across a few major cities of China.

If the company is able to successful list all 3 segments of its business; its clinics in China, in Malaysia, and its manufacturing business, it will be able to bring in more funds to expand in areas which management is interested in. However, that would also mean that the company would end up owning a much lesser stake in all these three businesses and might not enjoy the full growth from them in the future.

Foolish Summary

Although the plan will free up some funds for the company, the company need to ensure that it is able to reinvest the funds at a rate that would not be dilutive for its shareholders in the long term. If it is not able to do that, shareholders might not be able to see a rise in earnings per share even if the overall profit of the group increased due to the diluted stakes in the three businesses.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim does not own any companies mentioned above.