This article by Jennifer Tan (left, Director, Research & Products, Equities & Fixed Income, at the Singapore Exchange) was published in SGX's kopi-C: the Company brew series on 26 January 2018. The article is republished with permission.
Oral medicine specialist Dr Shao Yongxin has always been fascinated by the artistry and technical expertise involved in the practice of dentistry.
"At the same time, as my patients found hope and obtained relief through their treatments, I discovered joy, meaning and a sense of achievement."
Next, Shao focused on laying the foundation for the Group's future expansion and strengthening its competitive edge by building an ecosystem - one that comprised dental schools, research centres, as well as equipment and materials sales units.
In 1997, Aoxin set up its own clinical research system through dental technology centres that carried out independent research projects, mostly focusing on dental prostheses, including dentures, crowns and bridges.
Two years later, it became the main distributor for Ivoclar Vivadent AG's dental products in China, and developed 10 more dealerships with other oral and dental companies, including KaVo, Bredent and Smile Line.
"This supply chain enabled us to extend our footprint and entrench our position, while seizing relevant opportunities and meeting challenges in the industry," Shao said.
Fresh talent was critical to sustaining Aoxin's growth and establishing a solid brand. To alleviate the shortage of skilled professionals in the industry, it set up training institutions to groom best-in-class dentists.
|Our mission is to raise the standards of dental care in China.
- Dr. Shao Yongxin
"Human resource is our biggest issue," he admitted.
These institutions offered a platform for talented staff to realize their potential, as well as allowed aspiring individuals to gain knowledge and achieve professional status.
"Regardless whether these dentists are employed by Aoxin or other clinics, the public can be assured of the quality of service provided. Our mission is to raise the standards of dental care in China," he added.
Shao recognised that to boost practice standards and expand the suite of services offered, the integration of resources was essential. "So from 2010, we sought partners who could provide the relevant synergies."
In 2014, Aoxin Dental Hospital formed a joint venture with Singapore's Q&M Dental Group, which had acquired Panjin Jincheng Dental Clinic, Panjin Jinsai Dental Clinic, Gaizhou Aoxin Dental Hospital, and Shenyang Lanhai Tongmao Medical Equipment Co Ltd. These acquisitions resulted in the 2016 plan to build a Stomatological Hospital at Panjin. While these plans were in gestation, Aoxin Q&M Dental Group listed on SGX's Catalist board in April 2017.
Aoxin has a current market capitalisation of more than S$74 million. Its shares have held steady at its initial public offer price of 20 Singapore cents.
The Group provides a comprehensive suite of general and specialist dental services through 11 dental centres, comprising four dental hospitals and seven polyclinics, located across four cities in Liaoning Province. It also owns a dental equipment and supplies distribution network spanning three provinces in northern China. It currently has 301 dental professionals, including 120 dentists, 130 dental surgery assistants and 61 dental lab technicians.
Undoubtedly, the outlook for China's dental treatment market remains bright.
In the near term, the Group's priority is to build a dental hospital of international standards. It is also intent on expanding organically, as well as through acquisitions, joint ventures and partnerships.
"Our M&A philosophy is centred on assimilating the target company into the Group, and creating synergies that allow the target company to grow profitably, in a stable manner," Shao noted.
|Our aim is to create a professional dental treatment ecosystem, educate the public on dental health, and boost awareness of lifetime dental care.
- Dr. Shao Yongxin
"This is done by injecting resources and providing management assistance."
Over the past year, following its IPO, Aoxin acquired Shenyang QingAoMei Oral Restorative Technology Co Ltd, one of the largest providers of custom-made dental prosthetic devices in north-eastern China, as well as Zhuanghe City Aoxin Dawei Dental Co Ltd, a dental clinic in Zhuanghe, Liaoning province.
Looking back on the past 30 years in stomatology, Shao has yet to experience a dull day. "That's one thing I love about this industry. The possibilities are limitless, and new developments are always emerging - this adds an element of surprise to the everyday."
When he is not treating patients or dealing with the Group's operational issues, Shao is pottering around the kitchen at home. Apart from double-boiled soups, his favourite dish is stewed lamb.
"I really enjoy spending whatever little free time I have to cook an exquisite meal - this inspires me as much as dentistry. And yes, I am a better cook than my wife!" he laughed.
In the kitchen, Shao experiments with a wide range of ingredients, aiming to concoct the best possible culinary experience from a myriad of combinations.
"I'm prepared to spend hours - sometimes staying up late into the night - to simmer a pot of delicious soup. And because good food should always be shared, I usually invite friends and colleagues to savour it with me."
Meanwhile, Shao doesn't expect his only son, 32, to follow in his footsteps. "I want him to find his own path and chase his own dreams," he smiled.
The 56-year-old is also a strong advocate of the spirit of giving. "Before you can receive, you must be willing to give," he pointed out.
"This should be the guiding principle in our daily routines, both in our personal and professional lives, be it in trivial pursuits or the significant milestones."
|Year ended 31 December
|Profit/loss before tax from operations||13,735||8,700||3,717||-4,066|
|Attributable profit/loss net of tax||17,706||540||-538||-4,126|
|Half-year ended 31 December (RMB '000)||1HFY2017||1HFY2016
|Profit before tax from operations||3,601||7,066||-49.0%|
|Profit after tax from operations*||6,497||4,536||43.2%|
* Excludes professional fees and expenses related to listing
Source: IPO prospectus, company data
|Outlook & Risks|
|1. The Group intends to continue executing the business plans outlined below:
Aoxin Q&M Dental Group Ltd
Aoxin Q & M Dental Group is one of the leading providers of private dental services and dental equipment and dental supplies in the Liaoning Province of the People's Republic of China. It was listed on SGX Catalist board on 26 April 2017.
Providing a comprehensive suite of both general and specialist dental services, the Group operates and/or manages 11 dental centres, comprising four dental hospitals and seven polyclinics, in four cities in Liaoning Province - Shenyang, Huludao, Panjin and Gaizhou.
It has 301 dental professionals, including 120 dentists, 130 dental surgery assistants and 61 dental lab technicians. In addition, the Group distributes dental equipment and supplies used in the provision of dental services, and has a distribution network that covers the Liaoning, Heilongjiang and Jilin Provinces in northern China.