Q&A: Modern Dental (3600 HK)

Global provider of low-cost dental prosthetics. Estimated reading time: 13 minutes

Disclaimer: Asian Century Stocks uses information sources believed to be reliable, but their accuracy cannot be guaranteed. The information contained in this publication is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in such publications are those of the publisher and are subject to change without notice. You are advised to discuss your investment options with your financial advisers, including whether any investment suits your specific needs. From time to time, I may have positions in the securities covered in the articles on this website. In this case, I (Michael) do not hold a position in Modern Dental at the time of publishing this article, whereas Healthy Stock Picks does. This post and the below presentation are for informational and educational purposes only － not a recommendation to buy or sell shares.

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A few months ago, the Substack newsletter Healthy Stock Picks wrote about Chinese dental prosthetics company Modern Dental (现代牙科集团) (3600 HK - US$508 million) in an excellent report, which you can download here:

Modern Dental Group (healthy Stock Picks)

2.27MB ∙ PDF file

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Modern Dental’s stock price has treaded water this year － despite the recent enthusiasm for Chinese equities:

And today, the stock trades at a P/E ratio of 8.9x with a dividend yield of 4.1%. Those are remarkable numbers. But why does the stock trade at these valuations?

I wanted to check in with Mr Healthy Stock Picks to see what the thinks about the company today. And ask him a few questions that popped into my head when reading his deck. Let’s jump into it.

1. Tell us about the products that Modern Dental makes. How do they function and how do they compare with those of the competition?