QUALITAS MEDICAL GROUP LIMITED CORPORATE PRESENTATION January 2010
Contents Our Business Corporate Developments Growth Strategies Financial Highlights Summary
Business Overview
Who We Are Established in 1997 A leading primary healthcare services provider in Malaysia Operates GP clinics with supporting diagnostic services under Qualitas brand name Network of 166* clinics across the country More than 1 million patient visits annually Established MNC client base Regional network in India, Singapore, New Zealand & Cambodia Scaleable & replicable business model Listed on SGX Catalist on 1 September 2008 * As at 31 November 2009 4
Shareholding Structure Qualitas Medical Group Limited Dato Dr Ameen & Mr Karim Dhala (14.48%) QH Sdn Bhd (9.89%) Commerce Asset Ventures (CAV) & Commerce KPF Ventures (CKPF)* (26.55%) Others (0.48%) Public (48.6%) * CAV is a wholly owned subsidiary of CIMB Group Sdn Bhd (CIMB Group), which in turn is a wholly owned subsidiary of Bumiputra- Commerce Holdings Berhad (BCHB), a listed company on Bursa Malaysia. CAV legally and beneficially owns 51.0% of the ordinary shares in CKPF. As at 31 December 2009 5
Our Business Model Doctor-led and doctor-governed Network of doctor-shareholders Focus on primary healthcare services Outpatient services by GPs One-stop higher-end clinics with a team of GPs Prolonged care & monitoring of patients with chronic conditions Health maintenance & general health screening and periodic vaccinations Equipped with supporting medical diagnostics services eg ECGs, ultrasound and X-ray facilities Expansion into dental care services Network of dental clinics and international dental hospital in the region Includes cosmetic dentistry, family dentistry and implant and restorative dentistry services Specialised dental care such as root canal treatments, orthodontic treatments, implants, microscopic enhanced surgeries and laser assisted surgeries 6
Our Business Model Centralisation of Operations Allows data input by clinics to be uploaded to regional offices, corporate HQs, centralised purchasing services and key customers Integrated software system Centralised Purchasing System Efficiencies in inventory management Bulk discounts Uniform distribution of drugs through network of clinics and continuous availability Consistent clinic décor and signages Staff uniforms Sales and marketing materials Centralised Branding Centralised Billing System Convenience and ease to corporate clients and MCOs in administering health benefits 7
Our Malaysian Network 11 6 3 1 14 63 2 9 32 3 22 Our Malaysia Network 166 clinics across the country 83 owned clinics 83 affiliate and associate clinics As at 31 November 2009 8
Established Clientele of MNCs More than 5,000 corporate clients, including 11 MCOs Corporate patients make up 62% of approx. 544,000 patient visits in Malaysia in HY2009 Relationships with MNC clients a competitive advantage when expanding in the region MNCs and MCOs such as ING (MCO) As at 31 December 2009 9
Growing Regional Network 7 1 166 1 CAMBODIA India (2004) 1 owned clinic: Chennai: Screening and diagnostic facilities 40% stake in V.V Dentistree India Private Limited (Aug 09) Chennai: Dental care clinic chain with 5 clinics 1 international dental hospital Cambodia (Mar 08) Affiliate arrangement 1 in Phnom Penh New Zealand (Jun 09) 48% stake in Peak Primary Limited 4 primary healthcare services clinics Singapore (Dec 09) 75% stake in Dr Marcus Cooney & Associates Pte Ltd 1 dental care clinic 4 As at 31 December 2009 10
Corporate Developments
Regional and Business Expansion Beachhead into the Singapore market Acquisition of 75% stake in Dr Marcus Cooney & Associates Pte Ltd (DMCA) Dental clinic operating under the trade name SmileFocus Located in Camden Medical Centre Provides wide range of specialist dentistry services, including cosmetic dentistry, family dentistry, and implant and restorative dentistry services Staff strength of 42, including 3 specialists, 9 general dentists and 1 dental hygienist. All the doctors have strong international training and experience. 12
Regional and Business Expansion Beachhead into the Singapore market (cont d) Consideration to be paid in two tranches: May be satisfied fully in cash or partly in cash, partly in Qualitas shares Final valuation being equal to 7.5 times SmileFocus FY2010 profit after tax Max value capped at S$9 million Acquisition of remaining 25% stake subject to amongst other conditions Exercise of put option granted to Dr Cooney (shareholder of remaining 25% stake) or call option granted to Qualitas DMCA posted revenue of S$7.5 million and net profit after tax of S$0.6 million in FY2008 (approx. RM18.2 million and RM1.5 million respectively) Plans to expand the SmileFocus brand in Singapore and Malaysia 13
Regional and Business Expansion Expands regional footprint New Zealand Peak Primary (48% stake) Acquired 1 additional clinic in December 2009 Total of 4 clinics and 30 doctors in Peak s network To acquire another 1 clinic in February 2010 Target clinic has strength of 9 doctors India V.V Dentistree India (40% stake) Established 1 international dental hospital in August 2009 Located on a premise with 5 floors and total built up area of approx. 7000 sq ft Fully-equipped operation theatre with modern facilities, digital orthopantomogram (OPG) and state-of-the-art dental lab 14
Growth Strategies
Growth Strategies Enlarge Presence in Malaysia Expand GP clinic network Identify and acquire suitable clinics for acquisition Focus on strategic areas to expand and offer better geographical coverage Develop affiliate/associate arrangements with other clinics Provide training to individuals under the Ministry of Human Resources Train and Place Scheme, and organise other training programmes from time to time Extend range of services to day-care centres Signed a Memorandum of Understanding (MOU) with a day-care centre in Malaysia Explore introduction of dental services Via SmileFocus brand expansion 16
Growth Strategies Expand Presence in the Region India Continued expansion of dentistry services Continue looking for suitable diagnostic centres to partner with Australasia Explore opportunities to increase network of GP clinics in New Zealand Explore expansion of New Zealand clinic concept to Australia Singapore Increase number of SmileFocus dental clinics Replicate Qualitas business model in Singapore Signed a MOU with a GP practice to extend Qualitas reach 17
Financial Highlights
Financial Highlights (RM million) FY2005 FY2006 FY2007 FY2008 HY2008 HY2009 Revenue 51.9 52.5 57.7 62.2 30.3 32.3 Gross Profit 26.4 26.8 30.1 31.9 15.5 16.6 Profit Before Tax 8.5 8.4 8.3 8.7 3.8 4.3 Net Profit 6.7 6.2 6.3 6.1 2.9 3.0 Gross Profit Margin (%) 50.9 51.0 52.2 51.4 51.0 51.5 Profit before Tax Margin (%) 16.4 16.0 14.3 14.0 12.7 13.3 FY ended 31 December HY ended 30 June 19
Revenue RM mil 51.9 52.5 57.7 62.2 30.3 32.3 FY ended 31 December HY ended 30 June 20
Gross Profit RM mil FY ended 31 December HY ended 30 June 21
Financial Highlights As at 30 Jun 09 As at 31 Dec 08 Total assets (RM million) 76.1 78.0 Cash & cash equivalents (RM million) 21.7 24.7 Total equity (RM million) 64.6 64.8 Current Ratio 5.3 4.6 Debt to Equity 5.5% 6.9% Net Debt to Equity Cash Cash EPS (RM sens) 2.25 5.15 NAV per share (RM sens) 47.9 48.0 22
Summary
Investment Merits Focused on Primary Healthcare Services A Resilient and Defensive Sector One of the Largest Networks of Private Clinics in Malaysia Economies of Scale Regional Network in India, Singapore, New Zealand & Cambodia Scaleable & Replicable Business Model Strong Balance Sheet 24
Q&As