The Era of 'Unicorns' in Digital Healthcare... Lunit Surpasses 1 Trillion Won Intraday

Intraday High of 81,200 KRW
'Unicorn Standard' Market Cap Surpasses 1 Trillion KRW

Despite IPO Price Halving at One Point
On the Verge of Unicorn Status Thanks to AI Medical Power

In South Korea, the emergence of a unicorn company (a giant startup) among digital healthcare firms is imminent. The protagonist is Lunit, which recently declared its mission to conquer cancer through artificial intelligence (AI). Although it is not a strict unicorn since the term applies to unlisted companies, it is significant as Lunit is the first in digital healthcare to meet this criterion.

[Photo by Lunit]

According to the Korea Exchange on the 24th, Lunit's stock price soared to as high as 81,200 KRW during the trading session. Considering that Lunit has a total of 12,340,654 shares listed, if the stock price exceeds 81,100 KRW, it will surpass the unicorn benchmark of a market capitalization of 1 trillion KRW. Additionally, a securities firm issued a report setting a target price of 137,000 KRW for Lunit for the first time the day before. However, after breaking the unicorn threshold, selling pressure continued, and as of 2:40 PM, Lunit's stock was trading around 80,000 KRW.

Lunit's intraday unicorn breakthrough came about 10 months after its listing in July last year. At that time, concerns about the available float and continuous operating losses led to performance burdens, resulting in the IPO price being set significantly lower at 30,000 KRW compared to the lower end of the expected range of 44,000 KRW. Subsequently, investor sentiment froze, and by October last year, just three months after listing, the stock price fell to 18,900 KRW, about half of the IPO price. However, as global investment sentiment recovered, the rise of generative AI 'ChatGPT' early this year brought renewed attention to the medical AI sector, and the stock price has steadily increased recently.

In terms of performance, Lunit recorded its highest quarterly sales of 10.971 billion KRW in the first quarter of this year, while significantly reducing operating losses to 2.3 billion KRW. Compared to the same period last year, sales increased by 268.6%, and operating losses decreased by 82%. Notably, the first quarter sales accounted for 79% of last year's total sales of 13.9 billion KRW. Lunit reported that sales growth was driven by its core cancer diagnostic solution 'Lunit Insight' and cancer treatment decision solution 'Lunit Scope.'

Especially notable is the proportion and growth of overseas sales. First-quarter overseas sales reached 9.72 billion KRW, a 273.4% increase compared to the same period last year. As of the end of March, the number of medical institutions worldwide using Lunit Insight products surpassed 2,000. This is more than double the number of institutions since surpassing 1,000 in October last year, achieved in about five months. Lunit Scope also launched its first cancer treatment product in the global market last February through collaboration with the U.S. biohealthcare company Guardant Health.

Furthermore, on the 12th, Lunit was included in the Morgan Stanley Capital International (MSCI) Global Small Cap Index, which is believed to have strengthened buying momentum. The inclusion and exclusion lists are announced every February, May, August, and November, and Lunit was included as a global small-cap company in the May announcement. Although the official stock replacement date is the 31st, the preliminary buying ahead of this has also influenced the recent stock price rise.

Jae-won Jung, a researcher at Shinhan Investment Corp., analyzed, "Although Lunit's stock price has surged recently, it is still undervalued compared to global peers. Attention should be paid to the company's performance and the interest in the digital healthcare theme, as well as the still low valuation." Lunit is also scheduled to present 16 research abstracts, the most among global medical AI companies participating in the American Society of Clinical Oncology (ASCO) conference held next month in Chicago, USA.