[Click eStock] "Dentium, Margin Improvement... Basis for Corporate Value Reassessment"

[Asia Economy Reporter Ji Yeon-jin] Mirae Asset Securities announced on the 10th that Dentium achieved an earnings surprise in the first quarter of this year, following the fourth quarter of last year, and maintained a buy rating and a target price of 60,000 KRW.

Dentium's sales in the first quarter of this year increased by 39% year-on-year, and operating profit rose by 92%, exceeding market expectations. During this period, sales in China grew by 41% YoY, and domestic sales increased by 46%. Implant sales rose by 37%, and digital dentistry increased by 62%.

The company recorded a high operating profit margin of 27% in 2017, but from the following year, due to increased costs from product and regional diversification strategies, the operating profit margin continuously declined until 2020. However, the operating profit margin rose again to 27.4% in the first quarter of this year.

Kim Chung-hyun, a researcher at Mirae Asset Securities, stated, "As global inflation concerns have recently heightened the importance of margins, margin improvement is expected to be the basis for valuation rerating." He added, "Considering that the first quarter is usually the slowest season in the dental industry, the annual operating profit margin for 2022 is likely to improve compared to last year."

He also said, "The performance slowdown effect due to China's lockdown is a risk factor, but typically lockdowns do not eliminate demand but rather defer it, so the impact on annual performance is expected to be limited," adding, "Currently, the stock price is undervalued compared to competitors."

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