On the revenue front, weakness in the primary healthcare segment was partially offset by stronger dental equipment distribution sales to government hospitals and higher laboratory services revenue from Singapore.
"Primary healthcare remains the core earnings driver, and recurring demand from preventive and restorative treatments underpins strong revenue visibility over time," says Tang.
Aoxin's management is pursuing an aggressive acquisition-led expansion strategy into Central and Southern China, with two non-binding MOUs (memoranda of understanding) announced in 2026. The Central China target operates 30 clinics with around 80 dentists, valued at RMB150 million, while the Southern China target operates 15 clinics with around 60 dentists, valued at RMB376 million with consideration split evenly between cash and shares.
If completed, the deals would nearly triple Aoxin's current network to 59 clinics and add around 140 dentists, with Tang forecasting the acquisitions could contribute RMB32 million in profit in FY2027, lifting net profit nearly six-fold from RMB7 million to RMB40 million.
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According to Tang, Aoxin's balance sheet is well-positioned to fund this growth, with net cash doubling to RMB255 million following a proposed $20 million placement of 134 million shares, of which parent company Q&M Dental subscribed for 50 million shares.
Tang notes that China's dental market remains highly fragmented and is estimated at RMB160 billion – RMB200 billion, growing at 15%–20% annually, with organised dental chains expanding even faster at a compound annual growth rate (CAGR) of around 18%.
This fragmentation creates a compelling consolidation runway for Aoxin as a well-capitalised, institutionally-backed operator, says Tang.
Tang flags that despite the strong share price performance (up over 660% in the past three months), the near-term earnings contribution from acquisitions will take time to flow through, limiting upside in FY2026 where net profit is forecast at only RMB7.6 million on a 214 times FY2026 P/E before the step-change in 2027.
In spite of the remaining completion risk, Tang still views the company’s risk-reward profile as “favourable, with sustained earnings momentum likely to catalyse a valuation re-rating over the next 12 months.”
As at 10.33am on May 12, Aoxin Q&M Dental shares are trading at 26 cents flat.
