Singapore’s Big Winner of the Week: Q & M Dental Group (Singapore) Limited

Q & M Dental Group (Singapore) Limited (SGX: QC7), the largest private dental practice in Singapore, has gained some 13% in price since last Friday to end at S$0.90 yesterday.

In comparison, the Straits Times Index  (SGX: ^STI), Singapore’s market benchmark, only put on 0.3% during the same time frame. This makes Q & M one of the biggest winners in the local share market this week.

Q & M’s current share price of S$0.90 marks the highest close ever in the company’s history since going public in 2009; Since its listing, Q & M’s shares have jumped by more than 230% in price.

Some of those gains may be attributed to the announcements made by the company in recent times.

Earlier this month, Q & M announced that it is “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”.

This piece of news comes on top of announcements Q & M had made even earlier that it would be spinning off its subsidiary in China, Q & M Aidite International Pte Ltd, through an initial public offering and that it will gobble up all the shares of TP Dental Surgeons Pte. Ltd, a dental practice based in Singapore.

Then, on just Tuesday this week, Q & M revealed that it is looking to acquire a total of eight dental clinics in Singapore. The clinics would cost around S$20 million, which will be payable in both cash (S$10.9 million) and Q & M’s shares (S$9.5 million). The deal comes with total profit guarantees of around S$16.1  million for a period of up to 10 years (S$9.91 million for a period of 10 years; S$3 million for a period of six years; and S$3.2 million for eight years) and service agreements with the various dentists involved in the acquisition.

Dr. Ng Chin Siau, Group Chief Executive Officer of Q & M, commented on the acquisition:

“We are delighted to welcome our new partners into the Q & M family and would also like to take this opportunity to thank them for believing in Q & M. We believe that the mergers are central to our future ambition, and to bringing our shared vision – To provide quality and accessible dental healthcare – to more people.”

Shares of Q & M are now valued at a whopping 77 times the firm’s historical earnings.

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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 contributor Sudhan P doesn’t own shares in any companies mentioned.