Paul Chew of PhillipCapital has kept his "buy" call on Q&M Dental Group , following the turnaround as shown by its FY2024 earnings that exceeded his expectations.
Q&M's 2HFY2024 ended Dec 31 2024 revenue was down 4% y-o-y with the closure of a subsidiary's lab.
However, adjusted patmi was up 20% y-o-y to $10.8 million as losses in other units narrowed and employee costs lowered.
Besides a second interim dividend of 0.7 cents, up 32%, the company plans to buy back 50 million shares.
Sensing that the company's clinics are poised to generate better earnings down the round, along with turnaround in its subsidiaries, Chew, in his March 13 note, raised his target price from 36 cents to 40 cents, pegged to 18x FY2025 earnings.
"There is upside to our earnings if the company pursues a more aggressive acquisition strategy for growth and EM2AI finalises the agreement to sell its software to a network of approximately 1,000 clinics," says Chew.
See also: Maybank raises Frencken's TP on strong outlook, CGSI lowers TP on lower margins
Q&M shares last changed hands at 30 cents, up 7.14% year to date.
