• PCR testing in Singapore is to be reserved for symptomatic COVID-19 patients and travellers requiring on-arrival and pre-departure tests.
• Previously, PCR tests were required for ART-positive individuals (confirmatory) as well as patients exiting home quarantine.
• Reduced demand for PCR tests could see FY22F/23F earnings per share dip by 7%/3% for Q&M Dental (SGX:QC7). No change in our earnings estimates for now.

PCR Testing to be Reserved for Symptomatic Patients

• As announced by the Ministry of Health (MOH) on 9 Oct 2021, COVID-19 testing protocols have been streamlined for simplicity.
• The nation will be relying more heavily on antigen rapid tests (ART) while reserving usage of polymerase chain reaction tests (PCR) for symptomatic patients.
• Travellers flying to Singapore via vaccinated travel lanes (VTLs) will still need to take on-arrival and pre-departure PCR tests. At present, VTLs only exist with Germany and Brunei. Singapore is expanding VTLs to 9 other countries, with South Korea VTL starting from 15 Nov 2021 and the rest commencing on 19 Oct 2021.

New Protocols to Favour ART More; Negative for PCR

• The new MOH protocols cover 3 scenarios:
  1. symptomatic individuals w ho test ART-positive,
  2. asymptomatic individuals w ho test ART-positive,
  3. close contacts of a positive case.
• These three groups of individuals are required to take an initial ART to determine COVID-19 infection.
• Symptomatic individuals are expected to see a doctor to get an ART. PCR tests will be used at the discretion of doctors for patients displaying more severe symptoms.
• Asymptomatic individuals will not be required by law to undergo a PCR test.
• Previously, a confirmatory PCR test was needed for patients who tested ART-positive. Patients in home quarantine were also required to take a PCR test before exiting quarantine. These are now no longer required under the new protocols.

Dampener to Q&M’s Testing Revenue

• While PCR tests are expected to decrease assessment sees Q&M Dental's earnings per share declining by 7%/3% if testing capacity is reduced by ~50% in FY22F/23F.

Source: CGS-CIMB Research - 11 Oct 2021