Q & M Dental

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
#11
While i do believe that healthcare stock may warrant a 20 PER due to their defensive and growth prospect, I do not think that any of them should be rated as high as 50+.

The 400,000 is the patient pool not number of patients they see in a year, it is number of people who has registered with them so far. 250000 is the actual number of patient visit last year(not number of patient). In Singapore, they have around 6% market share based on number of dental clinics.

Despite the fact that they have increased revenue by 33% from 2008 to 2010, profit increase is a mere 10%. While it may partly be due to the new clinic effect (depreciation), it does shows that it is being affected by law of marginal return and not enjoying economy of scale. This is rather expected as a clinic will at least need 2 dentist and a receptionist. Rapid expansion will also cause them to take up places of higher rental fee.

And i am absolutely not comfortable with Q&M expanding to China of all places. Recently, one of my friend is flying to China to do a root canal treatment as it is much cheaper there even after taking into account the return trip ticket. One of the reason why I have always believe that dentist in fact earns more money per hour than a GP is because each year NUS Dentistry only takes in 50 students which is much lesser than that of Medical students and is the hardest faculty to get in. This is the case only for Singapore which try to limit the number of lawyer, doctor and dentist. The only competitive advantage that they have over the Chinese will be that they are from Singapore and offers a high safety standard. But the general population will still go for the much cheaper dentist(anyone can be one). Depending on the way they try to market it, margin will still be eroded. Before 2008, they enjoy a margin of 15% but this has drop to 10% since 2008.

I don't like how they try to expand so rapidly. It is possible for them to open another 50% more clinics, but that means that they have to find at least another 50 dentists (it has 45 clinics and on the conservative assumption that 1 clinic requires 2 dentists) which can easily be a yearly intake of dentists. As of 2008 of the 1442 dentist registered, only 1219 are in active pratice. How are they going to find more dentist other than by paying them more money?

Reply
#12
Lets see where Mr. Market takes the Q&M share price in the coming months. I find it difficult to believe that the dimension of the volumes traded in recent days is "business as usual".

Vested,
RBM
RBM, Retired Botanic MatSalleh
Reply
#13
The following is purely anecdotal evidence. Nothing to add towards the discussion on valuation or future growth prospects in China.

A colleague of mine just went to Q&M to have her wisdom tooth removed at the Citysquare mall outlet. She was extremely pleased with the service- didn't have to make an appointment, painless and quick. And this is coming from someone who dreads going to the dentist.

I guess they're doing something right.

(Not Vested)
Reply
#14
Reality check - Has anyone seen ANYONE made $ when they bought stocks at P/E=50x (think of Internet stocks in 2000) or the buyout folks like Peter lim paying such valuations?
Reply
#15
(13-01-2012, 03:28 PM)kazukirai Wrote: The following is purely anecdotal evidence. Nothing to add towards the discussion on valuation or future growth prospects in China.

A colleague of mine just went to Q&M to have her wisdom tooth removed at the Citysquare mall outlet. She was extremely pleased with the service- didn't have to make an appointment, painless and quick. And this is coming from someone who dreads going to the dentist.

I guess they're doing something right.

(Not Vested)

From my experience with any kind of service provider, walk-in without an appointment + no waiting time usually means business is bad or extremely lucky to have found an off-peak slot. No queue and no crowd also usually means servcie staff is not over-worked / harried and usually they can provide better service. Tongue

If I'm right, it's bad for the investor as it means biz is poor! Tongue


Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
Reply
#16
(13-01-2012, 05:45 PM)KopiKat Wrote: From my experience with any kind of service provider, walk-in without an appointment + no waiting time usually means business is bad or extremely lucky to have found an off-peak slot. No queue and no crowd also usually means servcie staff is not over-worked / harried and usually they can provide better service. Tongue

If I'm right, it's bad for the investor as it means biz is poor! Tongue

Ahaha, you have a point.
Anyway, to further clarify, my colleague went on a weekday evening after work. May explain the lack of crowd (or not).

Anyway, as weijian said, might be more relevant to ask if anyone has made a decent, sustained return from a company trading at P/E 50x.
Reply
#17
(14-01-2012, 11:22 PM)kazukirai Wrote:
(13-01-2012, 05:45 PM)KopiKat Wrote: From my experience with any kind of service provider, walk-in without an appointment + no waiting time usually means business is bad or extremely lucky to have found an off-peak slot. No queue and no crowd also usually means servcie staff is not over-worked / harried and usually they can provide better service. Tongue

If I'm right, it's bad for the investor as it means biz is poor! Tongue

Ahaha, you have a point.
Anyway, to further clarify, my colleague went on a weekday evening after work. May explain the lack of crowd (or not).

Anyway, as weijian said, might be more relevant to ask if anyone has made a decent, sustained return from a company trading at P/E 50x.

Why not. Open a cfd account and keep shorting the bugger till it's pe becomes 15.Smile

Reply
#18
lolz! Big Grin get the counter to go down to it's actual PE value?!! Tongue
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
Reply
#19
(15-01-2012, 12:13 AM)Bibi Wrote: Why not. Open a cfd account and keep shorting the bugger till it's pe becomes 15.Smile

haha..sometimes, the Market can remain irrational much longer than the person can remain solvent.

As someone has said in another thread/comment, let's see how this one goes.
Reply
#20
Heavyish volume again this morning - over 1.1 Million Q&M shares traded within the first five minutes of SGX trading. At least three times the usual full day volume. I do wonder if "something is up".

While I acknowledge, from reading the various responses to my 11th January VBs post, that I am likely in a minority of one or possibly two forummers regarding this particular counter.............. I have taken a punt on Q&M on the basis of my understanding of a) its upside potential, b) its management's focus and c) its recession resilience. Just my opinion. As with all my punts, I have estasblished my exit point - I'll be selling at S$ 1.10 and I'll sit it out until it gets there.

If, repeat "if", I do achieve this ......... then I'll respond to weijian's 13th January "reality check" message enquiring about who has made money by investing in > 50 P/E stocks. While this response may therefore take some significant time, I believe that too often people are too focused or solely focused on P/E ratios alone. At Q&M's low point this year, Mr. Market gave it a share price corresponding to a P/E of 31.5 - it has gone up "a bit" since that "low point".

Mr. Market will decide. Lets take another look down the road.

Vested,
RBM
RBM, Retired Botanic MatSalleh
Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)