[Click eStock] "Ray, Earnings Rebound This Year... Full-Scale China Sales Next Year"
[Asia Economy Reporter Yoo Hyun-seok] Kiwoom Securities analyzed on the 3rd that Ray's performance will regrow this year. The investment opinion is 'Buy', and the target stock price is 80,000 KRW.
Kiwoom Securities expected Ray's performance to continuously improve. On a consolidated basis for the first quarter, sales and operating profit were 14.9 billion KRW and 300 million KRW, respectively. However, in the second quarter, sales of 21.2 billion KRW and operating profit of 2.6 billion KRW are expected. This represents a 172% increase and a turnaround to profit compared to the same period last year.
Jae-il Park, a researcher at Kiwoom Securities, said, "Delivery volumes to export countries excluding India have normalized, and due to the effects of exhibitions and seminars resuming around the end of the second quarter, new demand is also expected to increase rapidly."
Sales and operating profit for this year are expected to reach 93.7 billion KRW and 18 billion KRW, respectively, representing increases of 70% and 293% compared to the previous year. He emphasized, "It is expected to enter a phase of performance regrowth," adding, "Expansion of volume due to normalization in major export countries, new sales generated from ODM supply contracts, and expansion of product lineups."
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In particular, full-scale sales in China are expected next year. He explained, "It is expected that a formal contract will be signed within the second half of the year with Care Capital (PE), which holds the largest dental distribution network in China and signed a memorandum of understanding (MOU) with Ray last February. Including new sales in 2022, sales in China are estimated to reach around 60 billion KRW," adding, "Care Capital owns Angel Align (the number one transparent orthodontic device market share in China) and plans to proceed with the transparent orthodontic device business, with Ray expected to supply materials and software."
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