Biol, a developer of high-frequency energy-based skin beauty medical devices, is showing strong performance. Based on proprietary technology, the company is continuously expanding its presence mainly in the Americas, and securities firms' analyses indicating higher growth rates and profitability compared to competitors seem to be influencing its stock price.
As of 10:59 AM on the 5th, Biol is trading at 7,450 KRW, up 9.56% from the previous day.
Seopseob Shim, a researcher at NH Investment & Securities, explained, "Despite the rise in Biol's stock price, there is still significant growth potential from a mid- to long-term perspective. The main devices, Scarlet S and Silfirm X, use a high-frequency (RF) energy delivery method through non-insulated microneedles." Silfirm X is a device that utilizes invasive high-frequency (Needle RF) and a 'dual wave' method. It is the world's first device capable of 300μm (micrometer) treatment.
He added, "One of the core proprietary technologies, the 'NA Effect,' was first discovered and systematized by the founder and advisor, Rajongju. Awareness of microneedle RF devices and procedures, such as InMode's Morpheus8, is increasing."
He further stated, "Biol is rapidly growing while continuously expanding its presence mainly in the North American region. The ITC lawsuit filed by the Middle Eastern company's U.S. partner, Serendia, against domestic and foreign competitors is also a process of recognizing the original technology." He added, "The related expenses will be minimal, and although it is difficult to predict the outcome, we expect direct or indirect benefits in case of a win or settlement."
It is estimated that Biol achieved sales of 12 billion KRW and operating profit of 5.5 billion KRW in the second quarter of this year, representing increases of 53.0% and 84.1%, respectively, compared to the same period last year. The operating profit margin is expected to reach 45.8%.
Researcher Shim analyzed, "The second-quarter results appear to have exceeded market expectations. The start of Scarlet S sales to China from May contributed to the strong performance along with the expansion of new dealerships." He also emphasized, "New dealership contracts are continuing in Europe, Asia, and Latin America, and growth in existing regions is also ongoing, so maximum quarterly results are expected to be broken every quarter through the fourth quarter of this year."
He estimated, "The CFDA certification for Silfirm X in Brazil and China, where approval has been delayed, is also expected to be obtained within this year. New products are also being prepared for launch, which will sustain growth momentum through the second half along with strong performance."
He concluded, "Given the high growth rate and profitability compared to peers in the same industry, it is reasonable to assign a valuation premium. The current stock price corresponds to a price-to-earnings ratio (PER) of 16.2 based on expected performance, which is not burdensome."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
