However, while turning a bit more optimistic about the company, analysts covering this counter prefer to see whether the company can pull off this multi-pronged execution before they turn fully bullish on it.
Paul Chew of PhillipCapital estimates that the total value of the acquisitions, to be paid using a combination of cash and shares, will be around $272 million. With more than 70 dental clinics to be added to the just over 100 that Q&M already operates.
Depending on how the acquisitions are structured, these new clinics, estimates Chew, can bring in a profit guarantee of some $200 million over a five- to eight-year period, which varies from deal to deal, but alone will help generate earnings growth of 14% per year for the next three years. Upon completion of the acquisitions, Q&M could double its earnings.
Chew’s post-acquisition earnings estimate for the current FY2026 is 3.5 cents per share, up 80%. His fair value, excluding amortisation of intangibles, is 95 cents per share. However, for now, Chew is applying a 50% discount on the earnings accretion from the pending completion of the acquisitions, leading nonetheless to a higher target price of 71 cents, up from 54.5 cents previously
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Prospects will shape up, but not immediately. “We view the long tenure of the share moratorium, service agreement and profit guarantee as equivalent to a permanent partnership to grow and scale up a new franchise and platform,” says Chew.
More recently, Eric Ong of Maybank Securities has kept his call for this counter at “hold” as he believes that at current levels, Q&M’s share price represents a relatively balanced risk-reward ratio. Nonetheless, citing the ongoing acquisitions, Ong has raised his target from 43 cents to 64 cents.
He likes this stock for possessing better capital flexibility, which is put to good use with the “strong desire” to expand significantly beyond the traditional markets of Singapore and Malaysia.
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As Q&M is still undertaking due diligence on these targets, Ong has not factored in the potential earnings contribution into his forecasts, given the timing and completion uncertainty.
Based on Ong’s best-case scenario prediction, which is the completion of all three acquisitions by the end of this year, Q&M could potentially double its FY2027 earnings per share to three cents.
“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.
In the best-case scenario, he estimates a fair value of around 75 cents for Q&M, using a target multiple of 25 times the FY2027 fully diluted P/E ratio.
In the worst-case scenario, which is the 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 driven 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 the 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 Dec 31, 2025, towards additional share buybacks and higher dividend payouts to shareholders instead of pursuing acquisitions,” Ong says.
