[Post-IPO] Ray Resumes Growth Overcoming COVID-19

[Asia Economy Reporter Hyunseok Yoo] The growth of 'RAY,' a manufacturer and seller of dental medical devices such as computed tomography (CT) and X-ray (X-Ray), has resumed. Although performance stalled last year due to COVID-19, sales are rapidly increasing as exports of its main products have restarted.

Founded in 2004, RAY is a medical device manufacturer. Its main products are divided into digital treatment solutions such as 3D scanning, artificial intelligence (AI)-based computer-aided design (CAD), and 3D printers, as well as digital diagnostic systems including X-rays and computed tomography. The company entered the KOSDAQ market in 2019.

When listed on the KOSDAQ market, it raised 19.9 billion KRW. By next year, it planned to use 5.2 billion KRW for research and development (R&D), 4.6 billion KRW for operating funds, 4.9 billion KRW for facility funds, and 5.2 billion KRW for other investments. Up to the first half of this year, it invested 2.1 billion KRW in R&D, 3.0 billion KRW in operating funds, 4.4 billion KRW in facility funds, and 5.5 billion KRW in other investments.

Through investments, production capacity has expanded. As of 2018, before listing, RAY produced only 2D/3D X-ray products. However, it has increased its product lineup by newly producing IO sensors and IP scanners, which are types of digital diagnostic systems. Along with this, the production capacity of 2D/3D X-rays increased from 1,152 units per year to 2,170 units last year.

Performance has grown every year except last year. Sales, which were 51.5 billion KRW in 2018, jumped to 73.1 billion KRW in 2019. Then, due to difficulties in exports caused by COVID-19 last year, sales decreased to 55.2 billion KRW. However, in the first half of this year, sales reached 38.6 billion KRW with an operating profit of 5.3 billion KRW. Sales increased by 91.80% compared to the same period last year, and operating profit turned positive.

The biggest reason for the improvement in performance is the recovery of exports. RAY generates 90% of its total sales from exports. It operates seven overseas subsidiaries and branches, exporting to more than 70 countries worldwide. Additionally, to expand overseas markets, it is promoting the establishment of new overseas subsidiaries in Asia and North America.

Sales in the first half of last year were 20.1 billion KRW, with 18.9 billion KRW generated overseas. Export sales in the first half of this year reached 35.0 billion KRW. A company official stated, "As of the first half of this year, sales increased compared to the same period last year in the order of China 31%, the United States 20%, Japan 9%, Europe 9%, and Korea 8%."

The possibility of performance improvement in the second half is also high. RAY is currently preparing to establish a joint venture (JV) with a Chinese company in the second half. Once the JV is finalized, faster growth in China is expected.

Expectations are also high for new products such as the 3D oral scanner and transparent orthodontic devices. In February, RAY acquired DDS, a 3D oral scanner company. Unlike traditional dental methods that use impression materials to take dental molds, the 3D oral scanner digitally captures dental molds directly inside the mouth and sends them to dental labs or allows immediate design at the dental clinic. It is scheduled to be launched in October and will begin full-scale sales. Additionally, the transparent orthodontic device has the advantage of reducing production time by more than half compared to existing products.

According to FnGuide, securities firms forecast RAY's average sales and operating profit for this year at 92.1 billion KRW and 17.4 billion KRW, respectively, representing increases of 66.89% and 278.90% compared to the previous year. Next year, sales are expected to reach 136.1 billion KRW with an operating profit of 28.9 billion KRW. The company also expects improved performance in the second half. A company official emphasized, "Exports are showing strong performance worldwide," adding, "The outlook for the second half is also positive."