{"id":2454,"date":"2017-04-26T08:42:08","date_gmt":"2017-04-26T00:42:08","guid":{"rendered":"https:\/\/www.smallcapasia.com\/?p=2454"},"modified":"2017-04-26T09:32:35","modified_gmt":"2017-04-26T01:32:35","slug":"5-things-about-aoxin-qm-dental","status":"publish","type":"post","link":"https:\/\/www.smallcapasia.com\/zh-hant\/5-things-about-aoxin-qm-dental\/","title":{"rendered":"5 Things Investors should know about Aoxin Q&M Dental Group"},"content":{"rendered":"

AOXIN Q&M Dental Group<\/strong>\u00a0(SGX:1D4) is the latest IPO to\u00a0join the\u00a0SGX Catalist with proposed listing of 57m new shares at $0.20 each entirely via private placement.<\/p>\n

It is seeking to raise net proceeds of about S$9.1 million and\u00a0will\u00a0commence trading on 26 April 2017 (today!).<\/p>\n

You can check out the offering document here<\/a><\/em>.<\/p>\n

1. Aoxin’s Company\u00a0Profile<\/strong><\/h3>\n

As you can see from the name, Aoxin is spun off from its parent – Q&M Dental Group to tap on the rising demand from China. Here’s what I obtained from the offer doc (in my own words):<\/p>\n

Aoxin is\u00a0one of the leading providers of private dental services and dental equipment and supplies in the Liaoning Province, Northern PRC.<\/p>\n

As at the Latest Practicable Date, Aoxin\u00a0have 240 dental professionals, comprising 113 dentists and 127 dental surgery assistants.<\/p>\n

They operate and\/or manage 11\u00a0dental centres, comprising 4\u00a0dental hospitals and 7\u00a0polyclinics.<\/p>\n

The centres are located in\u00a04 different cities in Liaoning Province, Northern PRC, namely, Shenyang, Huludao, Panjin and Gaizhou.<\/p>\n

Additionally, Aoxin also owns a\u00a0dental equipment and supplies distribution network which covers the Liaoning, Heilongjiang and Jilin Provinces in the Northern PRC.<\/p>\n

In short, Aoxin’s core business can be categorised into 2\u00a0business segments: <\/em><\/p>\n

    \n
  1. Providing private dental services <\/strong>& management of dental centres<\/strong> for and on behalf of other owners<\/li>\n
  2. Distribution<\/strong> of dental equipment and supplies.<\/li>\n<\/ol>\n

    2. IPO Details<\/strong><\/h3>\n

    Following the placement, Aoxin will have a market cap of S$71.2 million.<\/p>\n

    Q&M (SGX:QC7) will retain a 45.9% stake while its executive director and chief executive Shao Yongxin will\u00a0hold a 30.08%\u00a0stake.<\/p>\n

    \"AoxinT<\/em><\/a>aken from Offer Document\u00a0<\/em><\/p>\n

    <\/section>\n

    As you can see, the bulk of funds raised\u00a0– S$6.4 million (70.3%) of net proceeds would go into expansion of its business.<\/p>\n

    The remaining amount of S$2.7 million (29.7) is set aside\u00a0for “enhancement of infrastructure and working capital purposes”.<\/p>\n

    3. Financials<\/strong><\/h3>\n

    \"Aoxin<\/a><\/h3>\n

    \"Aoxin<\/a><\/h3>\n

    The company has seen explosive growth over the 3-year period from FY2013-2015.<\/p>\n

    Revenue skyrocketed from Rmb0.5m to Rmb46.5m, underpinned by strong M&A activity, as well as increased patient visitorship.<\/p>\n

    It also turned around from a Rmb4.1m loss in FY13 to a Rmb4.8m profit in FY15.<\/p>\n

    In the latest 9M16 results, core net profit jumped to Rmb4.9m (+148%) on an 85% surge in revenue to Rmb61.5m.<\/p>\n

    A huge portion of the sales growth can be attributed to 3 big reasons:<\/p>\n