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Q&M Dental Group
Regaining stake in growth-enabled EM2AI
■ On 31 Mar 25, QNM announced that its 49%-owned associate, EM2AI, has received a medical device licence for its dental AI solutions in Australia.
■ On the same day, QNM also announced the acquisition of the outstanding 51% stake in EM2AI from its management for S$1.7m.
■ Based on pro-forma financials, the consolidation of EM2AI would have contributed S$0.4m in net profit to QNM in FY24.
■ Reiterate Add with an unchanged TP of S$0.43. We are positive on QNM regaining its stake in EM2AI but we keep our estimates unchanged for now
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We believe CNMC is a leveraged play on rising gold prices as it ramps up production capacity from FY25e onwards and is expected to generate an average FCF of S$34mn p.a. over the next 10 years, with an FCF yield of 24%.
We forecast PATMI to increase by 46.6% YoY to US$17.9mn in FY25e, with the dividend payout ratio remaining at least 40%, translating into a yield of 5.6%. We initiate coverage on CNMC with a BUY recommendation and a DCF-TP of S$0.49 (10.3x FY25e P/E). Given that the mining permit is valid until 2034, we assume no terminal value and discount cash flows for 10 years. CNMC is trading at an FY25e P/E of 7.2x and an EV/EBITDA of 2.1x.
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REITs – Singapore S-REITs Monthly Update (Mar 25)
While trade conflicts and tariffs remain a threat, the recent series of weak economic numbers has led to lower US government bond yields. Many blue-chip S-REITs have already corrected and are trading at attractive yields of 6-7%.
Maintain OVERWEIGHT. BUY retail REIT CICT (Target: S$2.37), data centre REIT DCREIT (Target: US$0.88) and healthcare REIT PREIT (Target: S$4.85). We also like CLAS (Target: S$1.38).
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We initiate Geo Energy with a BUY recommendation and a DCF target price of S$0.47. With the hauling road only 10% complete and 50% of the land cleared, we offer a 70% discount on the value of the increased coal production and toll revenue resulting from the new road.
The completion of the hauling road and jetty will triple the current production volume plus generate lucrative road toll revenue for Geo. The road and port infrastructure are being built for US$150mn and will be completed in 1H26. Of the four existing mining concessions, two mines are expected to be closed by FY28/29e
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Centurion Corp (CENT SP)
In the right space
Beneficiary of construction boom; Initiate BUY We initiate coverage on CENT with a BUY rating and TP of SGD1.45, based on 1.0x FY25E P/B. Despite the share price’s outperformance, we believe the current valuation of c.10x forward PE is not too excessive given its recurring earnings visibility from favourable demand-supply dynamics, especially due to strong construction demand in Singapore, coupled with a clear pipeline of capacity expansion.
Re-rating catalysts include more capital recycling initiatives like the potential spin-off of some of its accommodation assets into a REIT, and inorganic growth via JVs/M&As. Key downside risks are bed oversupply amid heightened competition and/or a deterioration in the macroeconomic environment.
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