[Click eStock] "Ray, Expanding Premium Products... Target Price Up"

Hana Securities on the 30th raised the target price for Ray to 48,000 KRW, anticipating an expansion of premium products within the premier market.

Hana Securities cited the growth drivers for Ray as follows: ▲ Increasing the ASP of existing package equipment based on the scalability of Rayface, as well as compatibility with other companies' equipment contributing to top-line growth ▲ Reflecting the full impact of sales increase from CAPA expansion in the second half of this year due to rising domestic and international digital dental demand ▲ Fully reflecting sales to China through the normal operation of the Chinese factory starting in the second half of 2024.

Researcher Kim Doohyun of Hana Securities stated in the report on the same day, “Ray plans to start its implant business in China following the full implementation of the Chinese government's VBP (Volume Based Procurement).” He added, “The implant business is scheduled to begin in the first half of 2024 in line with the expansion of the Chinese factory, and as the only domestic company capable of supplying dental equipment used in digital dental solutions in a turnkey form, it is expected to penetrate the Chinese implant market through synergy with its core business.”

Researcher Kim explained, “The ASP of Ray's digital dental equipment is growing alongside sales growth in the US and European markets,” adding, “The overseas market is less competitive than the domestic market, which is engaged in price competition, so it commands a higher ASP.”

He also said, “Ray's overseas sales will continue to grow through diversification of sales channels with global companies partnered at the world's largest dental show IDS held last March and by supplying digital dental equipment to the global dental company Modern Dental.” He noted, “In particular, Modern Dental operates about 80 service centers in more than 20 countries and serves 30,000 dental clinics and laboratories as customers. After completing equipment testing, supply began in the second quarter of this year.”

He continued, “Although China sales performance in the first quarter was weaker than expected (down 65% year-on-year), exports to China are expected to normalize from the second quarter and recover to expected levels.” He forecasted, “China is expanding digital dental equipment demand with multi-branch clinics, permission for private clinic establishment, and an increase in the number of dentists, which will lead to continuous growth in dental equipment sales to China.”

Furthermore, he added, “Ray is introducing franchising of dental hospitals within China,” and “It is establishing a production-distribution-supply structure domestically in China and is preparing to create a virtuous cycle structure from dentist education to startup and equipment supply through the introduction of Korean-style dental clinics.”