“Notably, its expansion drive is supported by enhanced capital flexibility and a strong desire to quickly diversify its footprint beyond the traditional markets of Singapore and Malaysia,” Ong states.
Last July, Q&M raised $130 million in notes under its $500 million multi-currency debt issuance programme, with net proceeds primarily intended to accelerate its M&A strategy.
“To align interests with all parties, it is seeking a partnership-driven acquisition model with long-term service agreements and the issuance of Q&M shares subject to a moratorium as part of the consideration,” Ong adds.
The analyst mentions that given the dental group is still undertaking due diligence on these targets, he has not factored in the potential earnings contribution into his forecasts given the timing and completion uncertainty.
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Based on Ong’s best-case scenario prediction, which is the completion of all three M&As, he forecast that Q&M could potentially double its FY2027’s earning per share to three cents assuming all three M&A are done by the end of this year.
“The total purchase amount for the acquisitions is about $270 million, with 60% of the consideration funded through cash and bank borrowings, and the remaining 40% consideration through equity (via the issuance of new shares), respectively,” Ong predicts.
With the best-case scenario, he estimates a fair value of around 75 cents for Q&M by using a target multiple of 25 times FY2027 fully diluted P/E ratio.
On a worst-case scenario basis, which is failure to complete all three M&As, Ong estimates Q&M could achieve a net profit of $14.3 million in FY2027, purely from organic growth, contributed by market share gains amid the continued expansion of its clinic network in Singapore and Malaysia.
“Based on this scenario, our fair value would be 53 cents, pegged at FY2027 P/E ratio of 35 times. We use a higher P/E ratio multiple due to lower execution and integration risks associated with organic expansion, while it is also able to channel its robust cash holdings of $117 million as at 31 Dec, 2025, towards additional share buybacks and higher dividend payouts to shareholders instead of pursuing acquisitions,” Ong says.
