Me & My Money: Dental group CEO holds steady to quality blue chips
SINGAPORE – Blue chips tend to be seen as a boring but reliable pillar of the investment world but dental care executive Leon Luai has being snapping up these tried and true gems now that prices are low amid the lingering economic uncertainty.
His strategy has been refined over time and he usually holds onto these shares for five years or more, reaping average annual returns of about 5 to 7 per cent.
But he also rates diversity as important for conservative investors like him, which has led to holdings in government and company bonds and Reits (real estate investment trusts).
Mr Luai is chief executive of Oracare Group, which has around 40 clinics across Singapore, Thailand and Indonesia.
The group also distributes dental equipment and supplies through its company A2Z Dental & Medical Supplies.
“The dental industry in South-east Asia is highly fragmented and offers attractive long-term growth potential,” he says, noting that there were nearly 900 private dental clinics in Singapore last year – 80 per cent owned by individual dentists.
Oracare is majority owned by White Cloud Capital, a private family investment company, and operates here under the Family Dental Centre and Expat Dental chains of clinics.
Mr Luai, who has worked for over 20 years in healthcare organisations such as Tan Tock Seng Hospital and the National Healthcare Group, took the Family Dental Centre reins in 2017.
He became Oracare CEO this year when it was set up to combine the group’s various dental businesses.
Oracare provides centralised corporate functions for dental practice owners, who can then focus on serving patients and developing staff, says Mr Luai, 49, who holds a master’s in business administration from the National University of Singapore.
The Singaporean is married to a housewife in her early 40s and they have two daughters, aged 12 and 15.
He says of his personal finances: “I see money as a tool – a means to provide my family with a comfortable life, and to allow everyone to pursue their passion or cause.”
Q: What’s the next stage of growth for your business?
A: Oracare Group plans to continue its expansion in Singapore, Thailand and Indonesia, through a combination of mergers and acquisitions and organic growth.
We also plan to enter new markets in South-east Asia through a two-pronged strategy.
The first involves investing in existing dental businesses and partnering with the owners to implement professional infrastructure that helps them accelerate growth and improve performance.
The second is through a subscription services model developed by Expat Dental. Clinics subscribe to Oracare’s clinic management and dental treatment expertise for a fee each year.
This asset-light strategy was used in our partnership with Tawa Dental in Jakarta, which serves the premium segment of the population.
We plan to expand Expat Dental’s footprint in selected Tier 1 cities in South-east Asia in the coming year.
Q: What’s in your personal portfolio?
A: A quarter of my personal investment portfolio is in stocks, and another quarter in insurance.
Government and company bonds make up 20 per cent of my portfolio, and Reits 10 per cent. The rest is in savings.
Q: What are your immediate investment plans?
A: The disruptions brought about by Covid-19 have resulted in depressed pricing for some quality blue-chip stocks, and it is a good time to add some to average down the cost.
My wife is a homemaker and I contribute to her Central Provident Fund (CPF) account to build up her retirement fund. We service our monthly property loan repayments fully in cash so we can enjoy the high CPF interest rates.
We also made regular refunds of our CPF monies that were used to fund our home purchase through the CPF voluntary housing refunds scheme.
Q: How did you get interested in investing?
A: My brother, who is eight years older than me, introduced share trading to me when I was serving my national service.
Q: Describe your investing strategy.
A: My investing strategy is conservative, and diversification is key: never put all your eggs in one basket.
Despite the low interest rate, we maintain sufficient savings for a rainy day.
Everyone is well covered by insurance, including life and term insurance, and Integrated Shield Plans.
We also have savings and insurance plans in place that will cover our kids’ tertiary education. I have done up my will, lasting power of attorney and Advance Medical Directive.
My top three sectors for blue chips are financial, manufacturing and healthcare. I read up about the company and the management team, including analyst reports and recommendations.
Q: How are you planning for retirement?
A: We have not calculated the amount of income that we need after retirement but we don’t foresee that we’ll need to make major adjustments in view of our simple lifestyles.
My retirement fund will come from CPF savings, personal savings, as well as bonds and endowment policies that will mature at various stages.
I find meaning in and I enjoy what I am doing in my profession, so I have not thought about retirement.
I have been serving on the board of mental health advocacy organisation Silver Ribbon (Singapore) since 2007. If I were to retire, I hope to contribute more towards the social service sector.
Q: Moneywise, what were your growing-up years like?
A: Dad used to run a small business in a Housing Board shophouse, which was both a shop and our home.
I have three older siblings. Mum was a homemaker and part-time seamstress. Money was often tight but none of us felt disadvantaged or in need.
My parents are now 81 years old and they live with us. I learnt about resilience from them. Their circumstances were much tougher and yet they managed to overcome challenges to give us a good education and comfortable living environment.
Q: Home is now…
A: A 99-year leasehold four-room condominium in Hougang, where we have been living for nine years.
Q: I drive…
A: The family car now is a five-year-old, white 1.2-litre Nissan Qashqai which my wife uses. I take public transport to work to reduce my carbon footprint.
Best and worst bets
Q: What has been your biggest investing mistake?
A: I was one of the approximately 34,000 retail investors that reportedly sank a total of $900 million into Hyflux perpetual securities and preference shares.
(He declined to disclose how much he lost personally.)
Hyflux reached the end of the road after the High Court approved its winding up on July 21.
Since my investment was made using profits from the sale of a freehold property in 2016, the pain probably wasn’t as keenly felt as others who might have sunk in their lifetime savings. Our hearts go out to them.
Still, it offered many valuable personal lessons – for example, never to invest in financial products that I don’t understand.
Q: And your best investment?
A: My best investment has been developing dental practice owners through Oracare.
Before joining forces with Oracare, our Thai business Mos Dental was a family-run business with a strong brand among consumers and dental professionals.
There was, however, no corporate entity, infrastructure, controls or processes. The glass ceiling was reached at 14 clinics.
In 2019, together with Mos Dental founder Dr Adisorn Hanworawong and his team, we optimised operations and unlocked management capacity.
With the investment and support, Mos Dental expanded to 24 clinics within two years.
Developing owners also means supporting dental associates’ continuous learning so that they gain skills, knowledge and experience to perform complex dental procedures over time.
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