[Newbie Replay] ④ BBCC Expands Its Range from Toothbrush Bristles to Filters

The KOSDAQ index briefly reached 905.56 during trading on September 16. It recovered to the 900 level for the first time in 1 year and 5 months since April 2018, triggering a flood of sell orders as investors sought to realize profits. Coincidentally, tech stocks that had led gains in the New York stock market also wavered, resulting in a rollercoaster market for KOSDAQ over the past two weeks. During this period, newly listed companies on the KOSDAQ market such as Wonbang Tech, Vinatek, Baxel Bio, BBC, and PIMS were not immune to the unstable investor sentiment. Except for Vinatek, which transferred its listing from KONEX to KOSDAQ, these companies are trading below their IPO prices. Asia Economy takes another look at the business structures and growth potential of these newly listed companies.

[Asia Economy Reporter Jang Hyowon] BBC, a dental care specialist company based on fine bristle materials, has shown sluggish performance after its listing. The market expects that if BBC’s filter media business stabilizes, sales will begin from next year.

According to the financial investment industry on the 3rd, BBC was listed on the KOSDAQ market on August 21 with an IPO price of 30,700 KRW. On the first day of listing, the opening price was set at 27,650 KRW, down 9.93% from the IPO price, and the closing price was 22,300 KRW, down 27.36% from the IPO price. Since then, until August 29, the stock has not surpassed the IPO price for six trading days.

This is analyzed to be due to the small amount of locked-in shares and the large volume of circulating shares. Immediately after listing, BBC’s circulating shares amounted to 2,454,528 shares (45.8%). Of these, 19.23% were held by financial investors (FIs) such as venture capital (VC).

The total FI-held shares account for 32.81%, but only 13.58% of these shares are under lock-up agreements. The lock-up period is only one month. Therefore, there is a possibility of an overhang issue arising again after October 21.

BBC primarily operates in the dental care business, including functional toothbrush bristles. Based on polymer spinning and processing technology, it has built a diverse premium product portfolio in the toothbrush bristle market and is achieving stable sales.

BBC holds a high market share, with 7 out of 10 Koreans using toothbrush bristles made by BBC. The sales composition by major product is 44.4% premium bristles, 29.4% regular bristles, 10.1% anchorless exclusive bristles, and 16.1% other products. The export ratio overseas is 78.5%.

As of the first half of this year, sales amounted to 17.3 billion KRW and operating profit was 4.9 billion KRW, up 19% and 34% respectively compared to the same period last year. The operating profit margin is 28.3%. Net profit was 4.2 billion KRW, achieving 85.7% of last year’s total net profit of 4.9 billion KRW in just half a year.

BBC is expanding its business areas into cosmetics and industrial fields based on the stable growth of its toothbrush bristle business. With increased market demand due to the COVID-19 pandemic, it has also entered the mask business based on electrostatic MB (melt-blown nonwoven fabric) filters.

On August 24, BBC obtained manufacturing and sales approval for KF94 masks as quasi-drugs from the Ministry of Food and Drug Safety (MFDS). The approved health masks are two types: 'The Anshim Yellow Dust Mask' and 'The Stop Yellow Dust Mask.' The company plans to start mask production through its subsidiary K&K from October.

Park Jongseon, a researcher at Eugene Investment & Securities, said, “BBC entered the filter media business based on a national project conducted in 2018 and established a mass production system. This business can be applied to various sectors such as HVAC filters, air purifier filters, water treatment, and industrial liquid material filters,” adding, “As customer demand is increasing, once mass production starts in October this year, significant sales are expected next year.”

This content was produced with the assistance of AI translation services.