1 Company with Exposure to China’s Growing Healthcare Market

China is a massive country. With its land area of nearly 10 million square kilometres (that’s over 13,000 Singapores!), the world’s second largest economy houses around 1.4 billion people.

That sheer amount of people would mean that most of the country’s markets are huge in size. It certainly applies to China’s healthcare market.

In a November 2012 article, management consulting firm McKinsey & Company noted that healthcare spending in China had more than doubled from US$156 billion in 2006 to US$357 billion in 2011. The article also stated projections for the market to triple to US$1 trillion in size by 2020.

One company in Singapore’s stock market that has been steadily increasing its exposure to Chinese healthcare spending is dental services provider Q & M Dental Group (Singapore) Ltd (SGX: QC7). The company, which is based in Singapore, had first thought about expanding overseas in 2009. At that time, China was already in the company’s minds.

Q & M has since grown its Chinese business by leaps and bounds. According to data from S&P Global Market Intelligence, Q & M’s revenue from China was just S$1.4 million in 2013, representing just 2% of the company’s total revenue of S$71 million. In 2015, Q & M had sourced 22.6% of its total revenue of S$124 million from China.

Last month, Q & M announced that it will be spinning off Q & M Dental Holdings (China) on Singapore’s Catalist board. The latter will consist of the former’s “business of operating dental hospitals and clinics as well as a dental equipment and supplies distribution company in China.” Q & M will have to restructure its business for the spin-off to take place.

So as you can see, Q & M may lose some of its exposure to China pretty soon. The company will be holding an extraordinary general meeting in the future to seek shareholders’ approval for the spin-off and restructuring.

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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 Ong Kai Kiat doesn’t own shares in any companies mentioned.