Implant Stocks Soar 40% This Year, Unstoppable Rally

Sustained Growth in Strong Overseas Market Performance

[Asia Economy Reporter Park Jihwan] The stock prices of implant companies have shown a steep rise averaging 40% since the beginning of this year. Although they experienced sluggish performance due to the impact of COVID-19 until the third quarter of last year, the overseas markets have rapidly shown strong business activity, leading to positive forecasts for performance growth this year.

According to the Korea Exchange on the 10th, implant-related stocks such as Osstem Implant, Dentium, and Dio have recorded double-digit stock price increases since the start of the year. The leading stock, Osstem Implant, rose 53.7% since the beginning of the year, while Dentium and Dio also increased by 48.7% and 15.3%, respectively, during the same period.

The implant sector suffered significant performance setbacks due to COVID-19 until the third quarter of last year. Since dental treatments, which are the upstream industry, are conducted face-to-face, they were greatly affected by restrictions on outdoor activities. In Dentium's case, operating profits in the first and second quarters of last year decreased by 69.7% and 57.2%, respectively, compared to the same period the previous year. Dio also saw operating profits decline by 16-40% in the first to third quarters compared to the previous year.

From the fourth quarter, business activities became smoother, and performance recovery began in earnest. The most significant factor was the recovery of overseas exports. In the fourth quarter of last year, Osstem Implant posted an operating profit of 47.2 billion KRW, a 301.8% increase year-on-year. This was due to sales in China and North America increasing by more than 40% compared to the previous year. Dentium and Dio also saw their fourth-quarter operating profits increase by 125.5% and 22.7%, respectively, compared to the previous year. In Dentium's case, sales in China and Russia rose by 47.5% and 68.9%, respectively, achieving record quarterly performance in these regions. Samsung Securities researcher Jung Junyoung said, "The decline in performance last year was affected by sluggish operations in emerging markets due to COVID-19," adding, "From this year, demand is expected to increase in China, Russia, and Southeast Asia due to normalization of operations and deferred demand."

The securities industry expects these companies' performance growth to continue this year as well. According to FnGuide, Osstem Implant's market estimate for this year's sales is projected at 718.1 billion KRW, a 13.53% increase from the previous year. Dentium is estimated to increase by 27.5% to 294.1 billion KRW, and Dio by 25.81% to 151.1 billion KRW.