For the planned expansion in Australia, Q&M Dental will pay A$119.64 million ($107 million) for all of Experteeth Group, which operates 40 clinics and is staffed by around 120 dentists across New South Wales, Victoria, Queensland, Tasmania and the Australian Capital Territory.
Q&M Dental’s founder and CEO, Dr Ng Chin Siau, says Australia is one of the region’s most established and tightly regulated healthcare markets and that the scale and clinical depth could give the dental group a strong operating base for growth.
“We are pleased that the Experteeth Group’s founding dentist shareholders will continue to play an active role as strategic partners as we work together to expand the platform over the coming years,” says Ng.
At the same time, Q&M Dental will pay THB994.5 million ($39 million) for a 51% stake in Deezy Q&M Dental Group (Thailand) Co, which operates a network of 33 dental clinics nationwide.
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“Thailand has long been a market of interest for us, and Deezy stands out as the right partner for our next step forward. The clinic’s network, its professional team and the reputation Deezy has built over the years give us confidence in its growth potential, and we are looking forward to growing this business together in the years ahead,” Ng shares.
Following the latest corporate updates, Paul Chew of PhillipCapital has maintained his “buy” call and an unchanged target price of 71 cents.
Chew notes that the combined purchase consideration of some $146 million will be satisfied with $92 million in cash, plus the issuance of 86.7 million new shares. The new shares represent 9.1% of the existing shares issued at Q&M Dental. “The newly issued shares are placed under a 15-year moratorium and are being issued at a price consideration of 70 cents per share,” Chew adds.
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Based on Chew’s calculations, the combined acquisitions in Australia and Thailand are valued at a P/E ratio of 11.4 (Australia: 10 times; Thailand: 16 times). “The total purchase consideration of $146 million is largely backed by a profit guarantee of six to eight years, which adds up to $126 million,” Chew says.
“The implied earnings growth backed by the profit guarantee is around 13%, with Thailand’s earnings growth to be the highest at 22% in terms of CAGR,” he adds.
Overall, Chew believes that these acquisitions will be positive for Q&M Dental. “The acquisitions will increase our FY2026 earnings per share (EPS) forecast by 1.04 cents or 54% to 2.96 cents, which excludes amortisation of intangibles. As such, Q&M Dental’s valuation is being lowered to just 18 times the P/E ratio,” Chew says.
Apart from that, Chew believes the acquisitions will help accelerate Q&M Dental’s growth trajectory through the faster-growing geographies of Australia and Thailand and that they are backed by profit guarantees.
“Lastly, the 15-year share moratorium cum service agreement and profit guarantees ensure that there is alignment of interest to build and grow this Asia Pacific franchise. There are also synergies through group procurement, training, and best practices,” Chew adds.
Chew has pegged Q&M Dental’s valuation at a 25 times P/E ratio for FY2026, in line with the Singapore healthcare sector, resulting in an unchanged target price of 71 cents. The analyst adds that its 57.12%-owned Aoxin Q&M Dental is valued at market valuation, while the acquisitions have not been incorporated into his target price.
