[Click eStock] Expectation for JCS Medical's Successful Story in China 'Target Price Up'

Yuanta Securities announced on the 21st that it maintains a 'Buy' rating on JCY Medical and raises the target price from 8,540 KRW to 10,000 KRW. This adjustment is due to growth potential from overseas expansion. The target price was calculated by applying a 2023 expected earnings per share (EPS) of 502 KRW and a 2023 average price-to-earnings ratio (PER) of 20 times for domestic peers. Kwon Myung-jun, a researcher at Yuanta Securities, stated, "K-Aesthetic companies receive different valuations depending on their success in overseas expansion," adding, "If the entry into the Chinese market materializes within this year, we plan to further raise the target price."

JCY Medical recorded sales of 116.5 billion KRW and operating profit of 34.3 billion KRW last year, growing 43.3% and 45.3% respectively compared to the previous year. Product sales in the global market showed strong momentum, and the operating profit margin improved due to economies of scale from sales growth and an increased proportion of high-margin consumables sales. This year, sales are expected to grow by 25% and operating profit by 32.4%. The high growth of RF (radio frequency) driven by global demand continues, and the popularity of Linear Z, launched in the second quarter of last year, is sustained. Furthermore, the expectation of overseas expansion to China and the United States is likely to materialize within this year, making the realization highly probable.

With China's reopening, the aesthetic industry within China is expected to grow rapidly. The female population aged 40 and above is increasing quickly, there is a growing preference for non-surgical procedures over surgery, and aesthetic procedures offer various advantages such as faster recovery compared to surgery.

Researcher Kwon analyzed, "K-Aesthetic devices, including those from JCY Medical, have price competitiveness compared to Thermage (RF), the main product in China, and have been recognized for 'safety' through years of export references," adding, "JCY Medical is pursuing Potenza's Chinese regulatory approval within this year, and since it partners with 'Cynosure' for overseas expansion, the initial market penetration effect is expected to be high."