Channel NewsAsia

Q&M Dental to push China growth

Singapore mainboard-listed Q&M Dental Group plans to strengthen its presence in China. CEO Dr Ng Chin Siau said there's a possibility of acquiring more dental hospitals there.

SINGAPORE: Singapore mainboard-listed Q&M Dental Group plans to strengthen its presence in China. CEO Dr Ng Chin Siau said there's a possibility of acquiring more dental hospitals there. He made the comment in an interview with Channel NewsAsia.

When asked about the growth opportunities for Q&M in China, Dr Ng said: "In the context of China, in our recent MOU, we announced acquisition of six dental hospitals, this will put us in good position in China. If you look at the whole of China, there are over 1,000 dental hospitals, there is actually a lot of room for improvement.

"Also, the biggest difference is: for dental hospitals that we are buying, they all come with state medical insurance, this is called Yi Bao. More than 90% of the population of China are covered under Yi Bao.

"In the past we have 10 clinics in Beijing, Nanjing and Shanghai, all these are private dental clinics but without Yi Bao, so we are effectively treating 10% of the population then.

"Out of this 90% of the population who come with the Yi Bao card, there are a lot of people who can afford higher end procedures like implant, crown bridges and braces. We find that after four years in China, we finally realised that the business and the money is in the hospitals."

Q&M has made five acquisitions in China. Asked about its plans to list its China business, Dr Ng said: "Out of these five MOUs that we have announced, two, namely one in Shenyang and one in Qinghuangdao, we had also made further announcement on these deals, we are quite positive.

"Once these deals are closed we are quite comfortable to talk about an IPO exercise for our China business. For the location of the IPO, we explored China, Hong Kong and Singapore. To list in China, first of all we try to understand the Chinese rules and China being China, if you want to list in China, it means you have to delist from Singapore. This is something very difficult for us to go into at this point in time.

"So naturally, (with regard to) China IPO, even though we can enjoy P/E 60 to 100 times, at this point of time I think we will give it a miss. At this point, I think we will look at Hong Kong or Singapore."

Dr Ng touched on safeguards in place to ensure that dentists in China provide quality care, consistent with Q&M's brand in Singapore. "Our criteria is we employ only graduates or Masters students. We won't employ anybody who is not a grad or not qualified. This perception about Chinese dentists providing sub-quality, sub-standard dentistry has to be adjusted, it is not fair, because we only have a 5-million-strong population in Singapore and in China, we are talking about 1.3 billion people. That means they have more cases to practice on, so how can you say their standard is sub-standard? I disagree."

On what other growth markets Q&M is looking at, Dr Ng said: "Currently, we are operating mainly in Singapore. In Malaysia, we have a presence in KL and JB. In China, we have a presence in Shanghai, Beijing, Nanjing and now in Shenyang and Qinghuangdao.

"Going forward, I think the main focus will still be in China because there are so many dental hospitals there, whereas the new shareholders who have recently joined us from Heritas IMC Group, they have a presence in Indonesia, Thailand, Hong Kong. These are areas where they have very strong connection and good local ground work has been established. So we are looking into that and tapping into their local expertise and see what we can explore."

Dr Ng also talked about his vision for Q&M. "Naturally our aspiration is to make Q&M one of the largest dental players in the world. At this point of time, I won't say we are the largest, but we are one of the rare few listed companies in dentistry in the world. This is the first step.

"With such a big potential in China and in the region, I believe our aspiration of becoming the largest dental player in the world (stands) a good chance. I look at other competitors in the world, dental players, a lot of companies are actually domestic. They do very well in their domestic market, but not many are able to go cross-border."

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