DRGEM, Profiting from Samsung Electronics Stock Purchase... Earnings Also Growing Steadily

[Asia Economy Reporter Jang Hyowon] KOSDAQ-listed company DR GEM is beaming with joy as Samsung Electronics' stock price rises. The Samsung Electronics shares purchased at the 60,000 KRW level last November have climbed to the 80,000 KRW range.

According to the Financial Supervisory Service's electronic disclosure on the 16th, DR GEM purchased 74,404 shares of Samsung Electronics on the market for about 5 billion KRW on November 25 last year. The average price per share was 67,200 KRW.

The acquisition was for simple investment purposes, and all shares were bought with cash. The investment amount represents a significant scale, accounting for 15.4% of DR GEM's equity capital of 32.5 billion KRW.

At the time, opinions were divided in the market regarding DR GEM's purchase of Samsung Electronics shares. Some believed they bought at the peak as Samsung Electronics was hitting new highs daily, while others evaluated that they saw potential for further growth.

Ultimately, DR GEM's judgment has proven correct so far. As of the previous day, Samsung Electronics' closing price was 88,000 KRW. This means a valuation gain of about 31% in roughly a month and a half. The 5 billion KRW investment has grown to approximately 6.55 billion KRW.

In 2019, DR GEM's net profit was 5.7 billion KRW. The profit earned from the Samsung Electronics investment is equivalent to what they could earn in one quarter. This valuation gain is expected to be recorded as non-operating income in the fourth quarter of last year.

DR GEM is a company that researches, develops, manufactures, and sells X-ray imaging diagnostic equipment used in hospitals. Its self-developed product, the generator, is known as a key component of the X-ray system for detecting clear images. It holds global competitiveness, with an export ratio as high as 75%.

Not only in stock investment but also in performance, the company is experiencing rapid growth. As of the end of the third quarter last year, consolidated sales and operating profit were 82.3 billion KRW and 20.8 billion KRW, respectively, marking increases of 103% and 703% compared to the same period the previous year. High performance is expected to have continued into the fourth quarter as well.