KGI Securities (Singapore) Pte. Ltd. March 28, 2025

Q&M Dental Group Expands AI Footprint and Streamlines Operations for Improved Profitability

Expansion of AI Solutions Business

EM2AI, a 49%-owned associate of Q&M Dental, has secured regulatory licenses across multiple jurisdictions for its dental AI solutions. The company also signed a Memorandum of Understanding (MoU) with a regional dental solutions provider, enabling it to expand its footprint. With this collaboration, EM2AI is now set to provide its AI-powered dental solutions to over 1,100 clinics across the region, positioning the company for further growth. [[1]]

Increased Profitability Outlook

The company reported a strong improvement in profitability, with net profit margin (NPM) rising by 18.0% to S\$13.1 million in FY24. This was driven by cost-cutting initiatives, including the closure of underperforming clinics and the winding down of its medical laboratory business in September 2024 following the decline of COVID-related operations. Several expense categories declined year-over-year, reflecting the company’s effective streamlining efforts. The company expects these efficiency gains to sustain profitability into the next financial year. [[1]]

Dividend Payout and Share Buybacks

The Group announced an interim dividend of 0.70 Singapore cents per share for 2H24, bringing the FY24 annual dividend to a total of 1.1 Scents, representing a dividend payout ratio of 71%. Additionally, the company plans to conduct share buybacks of up to 50 million ordinary shares, a move aimed at enhancing long-term shareholder value. [[1]]

Ongoing Investments in AI to Enhance Dental Solutions

Q&M Dental continues to invest in AI through its subsidiary, EM2AI, to drive efficiency and innovation in dental care. EM2AI has developed multiple AI-powered solutions, including a caries detection system, an AI-driven treatment planning system, and an AI-based patient management system. These advancements enhance diagnostic accuracy, streamline treatment processes, and improve overall patient experience. [[2]]

Launch of AI-Powered “Treatment Plan” Module

EM2AI recently introduced its “Treatment Plan” AI module, which integrates Large Language Models (LLMs) to optimize treatment recommendations. By combining conventional clinical decision support systems with the processing power of LLMs, the module effectively analyzes and interprets patient data to provide holistic, objective, and data-driven treatment recommendations. This innovation further strengthens Q&M Dental’s proposition in AI-powered dentistry. [[2]]

Expansion into New Markets with Additional AI Licenses

EM2AI has obtained regulatory licenses to sell and distribute its dental AI solutions in Thailand, the Philippines, Vietnam, and Indonesia, expanding beyond its existing presence in Singapore and Malaysia. These approvals enable EM2AI to broaden its market reach and capitalize on the growing demand for AI-driven dental solutions across Southeast Asia. [[2]]

Strategic Partnership to Scale Regional Presence

Following its recent licensing approvals, EM2AI has signed a Memorandum of Understanding (MoU) with an established regional dental solutions provider, granting the partner a license to integrate EM2AI’s technology into its platform. This collaboration aligns with the company’s strategy to expand its business network and solidify its footprint in key regional markets. As a result, EM2AI is now set to provide its dental AI solutions to over 1,100 clinics across Singapore, Malaysia, Thailand, and Vietnam, reinforcing its growth trajectory and long-term value creation for shareholders. [[2]]

Future Plans: Leveraging the Johor-Singapore Special Economic Zone for Expansion

Q&M Dental is actively exploring regional expansion opportunities, with a focus on Malaysia, particularly within the Johor-Singapore Special Economic Zone (SEZ). The upcoming Rapid Transit System (RTS) is expected to enhance connectivity between the two countries, making Johor an attractive market for growth. As part of its strategy, Q&M is evaluating partnerships, acquisitions, and organic expansion to strengthen its presence in high-growth markets across Southeast Asia, driven by rising demand for quality dental services. [[3]]