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Investors’ Corner (Q&M Dental Group, Yanlord Land Group, M1, Parkway Life REIT)
Investors' Corner | 11 December 2014
Related stocks:
QC7
Z25
By: Shane Goh
Articles (99) Profile

Q&M Dental Group (S’pore)
Price – $0.42
Target – $0.50

With Q&M Dental Group’s acquisitions of Aoxin and Aidite, it now owns 3 dental hospitals, 3 dental clinics and the second largest dental zirconium producer in China. Private healthcare, including dental, has considerable growth prospects in China, from the government’s encouragement of private-sector involvement as part of healthcare reforms, a low penetration rate and growing affluence which should lift demand for higher-value services. In Singapore, growth should be sustained by the opening of new dental outlets, the potential acquisition of stand-alone dental practices, narrowing medical clinic losses and government subsidies for private dental treatments. While Singapore should continue to contribute a large chunk of revenue and profits, we expect this to diminish as China’s importance grows. Maintain BUY. Maybank Kim Eng (8 Dec)

Yanlord Land Group
Price – $1.07
Target – $1.02

Although the recent relaxation in mortgage restriction should help to boost upgrading demand where Yanlord Land Group should be a beneficiary, the firm’s conservative approach in new acquisitions in the past 2 years may cap its growth prospects ahead, in our view. According to SouFun, a leading real estate internet portal in China, Yanlord achieved total contracted sales of Rmb7.8b by value year-to-date in Oct-14, locking in 60% of its full-year contracted sales target of Rmb13b. At such rate, Yanlord’s sales pace falls behind the industry average of 69%. We believe Yanlord will need to grow its business scale more aggressively going forward in order to resume above-industry-average growth. Moreover, valuation is not attractive with Yanlord trading at 10x/9x 2014/15 PE ratio compared to an industry average of 7x and leaders at 8x. Maintain SELL. Deutsche Bank (5 Dec)

M1
Price – $3.58
Target – $4.00

The volume of new sign ups and re-contracts were low in Jul-14 and Aug-14 as customers waited for the launch of Apple iPhone6 and iPhone 6 Plus in Sep-14. Furthermore, M1 faced a supply constraint for the 2 devices in Sep-14. These led to a net reduction of 1,000 post-paid subscribers in 3Q14. However, the demand has returned while the supply constraint has alleviated in 4Q14. In its residential broadband business, its subscriber base for fibre broadband has expanded 27.3% y-o-y to 98,000 in 3Q14 while average revenue per user recovered by 7.4% q-o-q to $45 per month. However, M1 has withdrawn its application for a national TV license to broadcast free-to-air TV programmes. It foresees limited scope to cross carry exclusive content from SingTel and StarHub while a change in consumer behavior of downloading and viewing pirated content over the internet means that it does not make sense to invest heavily in pay-TV. Reiterate BUY. UOB-Kay Hian (4 Dec)

Parkway Life REIT
Price – $2.36
Target – $2.66

Parkway Life REIT derives its income from a diversified base of healthcare-related properties in Singapore, Japan and Malaysia. The REIT has one of the longest weighted-average lease expiry at 10 years and offers strong earnings visibility, of which 94% of its income has downside earnings protection. Prudently, Parkway’s manager has hedged 100% of its Singapore Dollar-Japanese Yen exposures till 2017, implying that distributions will not be impacted by forex volatility in the medium term. Apart from its in-built organic growth from regular uplifts in its rental contracts, acquisitions, mainly in Japan, have been the main driver for distribution-per-unit growth. Parkway was 1 of the first movers in amassing a portfolio of healthcare facilities in Japan, before the growing exuberance from private sector investors in recent times. Looking ahead, the manager is turning selective in further asset purchases and might look to capitalise on the robust investor interest to re-cycle capital and extract value. Maintain BUY. DBS Vickers (4 Dec)

Currently pursuing his Chartered Financial Analyst qualification, Shane provides coverage on the property, consumer and environmental sectors at Shares Investment.

Please click here for more information about this author.

Q&M Dental Group (S'pore)  -- -- --   
Business: Co is a private dental healthcare provider in Asia. [FY18 Turnover] Primary healthcare (93.1%), dental equipment & supplies distribution (6.9%)

Insight: May-19, 1Q19 total revenue inched up 4.2% to $29.9... Read More
Yanlord Land Group  1.240 +0.040 +3.33%   
Business: A real estate developer. [FY18 Turnover] Property development (95.2%), others (2.7%), property investment & hotel operations (2.1%).

Insight: May-19, 1Q19 revenue were halved to Rmb3.6b due to... Read More
Parkway Life REIT  3.060 -0.01 -0.33%   
Business: Invs REIT specialising in healthcare ppties.

Insight: Jul-18, 1H18 gross revenue rose 2.3% to $55.9m lar... Read More


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