Medical school reject gains big bite of dental business instead

Dr Ng Chin Siau, group CEO of Q&M Dental Group, who manages 76 dental clinics and three dental hospitals across Asia.
Dr Ng Chin Siau, group CEO of Q&M Dental Group, who manages 76 dental clinics and three dental hospitals across Asia. BT FILE PHOTO

It's a rejection that has turned out to be a blessing in disguise.

Dr Ng Chin Siau's application to medical school more than two decades ago was rejected, and the aspiring doctor settled for a place in the National University of Singapore's Faculty of Dentistry instead.

Graduating with a Bachelor of Dental Surgery degree in 1992, the founder and group CEO of Q & M Dental Group now manages 76 dental clinics and three dental hospitals across Asia.

"My first choice was to study medicine but I got rejected, so my dentistry professor took me in. I am very lucky to be where I am right now," Dr Ng recalled.

After graduation, Dr N

  • Q & M DENTAL GROUP

  • MARKET CAP: $553 million


    PRICE CHANGE YEAR-TO-DATE: 71.1%


    DIVIDEND YIELD: 1%


    RETURN ON EQUITY: 23.5%


    Source: SGX StockFacts (As of Oct 1)

g spent two years with the Institute of Dental Health before going into private practice in Bukit Batok. In November 1996, he bought over the practice and set up his first Q & M Dental clinic.

"I started off with fewer than 10 patients a day, but after more than two years, I was seeing 30 to 40. Patients tend to be doctor-centric - they usually come back to see the same doctor," he said.

The group now has 64 dental outlets, including clinics operating under other names, and four aesthetic medical clinics in Singapore. It has a pool of about 180 dentists, including 30 to 40 specialists, here. It also operates four dental clinics and three dental hospitals in China, as well as eight outlets in Malaysia.

The focus on patient care forms the backbone of the brand Quan Ming or Q & M, which means "for the people" in Chinese, said the 2010 winner of Ernst & Young's Entrepreneur of the Year Award in Healthcare Services.

Dr Ng was also named the Best CEO of the Year for listed companies with market capitalisation of $300 million to $1 billion at this year's Singapore Corporate Awards.

"We provide very competitive dental charges and our clinics are very accessible, mostly located in public housing estates. Our primary goals are customer satisfaction, as well as excellent and responsible service."

This ethos extends to staff and partners of the company.

"It's about how you treat people. If you show them respect, give them room to exercise their judgment and independence, they will reciprocate," said the father of three girls and a boy, aged nine to 19.

FAMILY BUSINESS

Dr Ng, the eldest of four sisters and two brothers, tries to teach his children what it means to give, to have a gracious and generous spirit.

Q & M plays a big part in the lives of the Ng family. His wife, Madam Foo Siew Jiuan, is the general manager, while one of his sisters, Ms Melanie Ng, is the group financial controller. Another sister is an area manager for a handful of clinics.

"Being related to the group CEO and working in the company is not easy," Dr Ng admitted. "If they do not perform better than other employees, they are in trouble."

CHINA A BIG MAGNET

Looking ahead, Q & M is focused on China and Singapore, and to a lesser extent, Malaysia, Dr Ng said.

China's growth outlook is rosy, thanks to demographic trends, including its 1.4 billion population. Dental health awareness is also below 10 per cent in China, compared to 40 to 50 per cent in Singapore.

Opportunities to hire qualified staff also abound, with more than 130,000 employable dentists, as compared with only 1,600 in Singapore, he noted.

"China is a very big magnet for us," added Dr Ng, who is a fan of the TV reality talent show, The Voice Of China.

For those reasons, the country has attracted an influx of funds seeking quality healthcare projects, particularly in first-tier cities, causing valuations to skyrocket.

"People are willing to pay 20 to 30 times PE for unlisted entities, which is way too much. There's a lot of money chasing a limited number of projects," Dr Ng said.

The company paid a price-earnings (PE) ratio of only 10 to 15 times for its two recent acquisitions in China - 51 per cent-owned dental materials manufacturer Qinhuangdao Aidite High Technical Ceramic Co, and 60 per cent-owned Aoxin Stomatology Group, which runs a chain of dental clinics and hospitals.

As a result, Q & M has switched its attention to government-run dental hospitals in provincial cities from private hospitals in locations like Beijing or Shanghai.

"Tier 1 cities attract the most bidders, including those from the United States, Taiwan, Germany. In Tier 2 and 3 cities, the local governments are more receptive to our presence, and we can explore opportunities to privatise a provincial dental hospital with share ownership," he added.

Its focus on hospitals vis-a-vis medical clinics is also due to demand.

"When the Chinese fall sick, most prefer to seek treatment at public hospitals to small clinics. Most of these government hospitals offer national medical insurance coverage," Dr Ng said.

Q & M plans to eventually spin off its two Chinese entities, but has not finalised the listing location.

"We now have strong joint venture partners in China, and that allows us to be more confident about getting bigger deals in the market," he added.

FRAGMENTED MARKET

Across the Causeway, Q & M is adopting a wait-and-see attitude due to the sliding Malaysian currency.

"With the weak ringgit, we would prefer to spend more of our time in China. We need the ringgit to stabilise first; our operating costs are rising due to the weakening of the currency. Many businesses are also adjusting to the new GST policy," he said.

Q & M may be able to play a part in spurring the consolidation of Malaysia's fragmented dental market.

"There's no listed company in Malaysia big enough to consolidate the individual dentists, like what we did in Singapore, so maybe Q & M can perform that role there too."

Meanwhile, Q & M faces the challenge of hiring qualified dental assistants, a factor that has curbed its expansion in some markets.

"We do not have a problem employing dentists. Dental assistants are harder to come by, because of the specialised skills that are required, and more importantly, the tight labour market in Singapore. That's slowing our growth."

Over the long term, Q & M aims to be to Asia's dentistry market what German automaker Volkswagen has been to the car industry, said Dr Ng, who has a passion for cars. "At Q & M, we also want to offer a full range of dental services from high to low end, for all the people."


• This interview is an excerpt from the Singapore Exchange's "kopi-C: the Company brew" column that features C-level executives of companies listed on SGX. A longer version of this piece can be found on SGX's My Gateway website.

A version of this article appeared in the print edition of The Straits Times on October 19, 2015, with the headline 'Medical school reject gains big bite of dental business instead'. Print Edition | Subscribe