[Click eStock] "Dentium, Growth Outlook for China Implant Market... Target Price Up 4%"

NH Investment & Securities Report

[Asia Economy Reporter Minji Lee] NH Investment & Securities maintained a buy rating on Dentium on the 24th and raised the target price by 4% from the previous level to 68,000 KRW.

In the fourth quarter of last year, Dentium recorded sales and operating profit of 76.3 billion KRW and 17.3 billion KRW, respectively, surpassing market expectations by 17% and 37%, marking an earnings surprise. This is attributed to confirmed cost reduction effects from strengthened online marketing.

Researcher Kwanjun Na of NH Investment & Securities explained, "Despite conservative allowance for doubtful accounts (provision rate 25%) considering COVID-19 uncertainties and inventory asset provisions, an excellent operating profit margin was achieved," adding, "85 billion KRW was reversed related to tax refund from winning a tax tribunal claim, resulting in a net profit attributable to controlling shareholders of 12.6 billion KRW, turning to black."

Supported by the easing of COVID-19, overseas sales also increased significantly. Sales in China and Russia reached 41.8 billion KRW and 9.6 billion KRW, respectively, showing growth of 47% and 69% compared to the previous year. These are the highest quarterly sales in the China and Russia regions.

This year, Dentium is expected to record sales of 295.3 billion KRW and operating profit of 50.9 billion KRW, growing 28% and 54% year-on-year, respectively. Considering the significant increase in the number of dentists capable of implant placement and implant demand in China, it appears that the Chinese implant market has entered a blooming phase.

Researcher Na stated, "Strong growth centered on emerging markets such as China, Russia, and Southeast Asia is expected this year," adding, "Profitability will also improve due to cost ratio improvements from the full-scale operation of new factories in China and Vietnam." He further added, "From this year, a sales growth rate exceeding 20% and a recovery of operating profit margin in the 20% range are also anticipated."