http://www.theedgemarkets.com/sg/ar...-maybank-kim-eng-higher-target-price-92-cents
SINGAPORE (Apr 29): Q&M Dental Group’s proposed acquisition of TP Dental Surgeons is expected to bump up its earnings prospects going forward.
Maybank Kim Eng raised its FY15-FY17 earnings per share (EPS) forecast by 1%-9% after offsetting Q&M’s higher financing costs from a $60 million medium term note issued last month and share dilution of 2.5% in FY15.
“As we expect deal completion by June this year, we have included six months of contribution for FY15,” said Maybank research analysts John Cheong and Gregory Yap in a note yesterday.
Cheong and Yap said TP Dental could contribute at least $2 million a year in earnings to Q&M based on its profit guarantee. TP Dental made $1.9 million PATMI in 2013.
“We lift our target price to 92 cents from 71 cents, still at 45 times EPS but rolled over to FY16,” they said with an unchanged “buy” call.
The pair expects Q&M to pursue more acquisitions given its $42 million cash pile gained from its recent MTN exercise.
At 2.17 pm today, Q&M fell 1 cent or 1.3% to 77.5 cents on trades of some 5.8 million shares.
