[Featured Stock] MetabioMed, Analysis of the Undervalued K Medical Device Company Shows Strong Performance

Meta BioMed is showing strong performance. Following its record-breaking quarterly results in the second quarter of this year, securities firms' analyses predicting good performance in the second half seem to be influencing the stock price.

As of 9:21 AM on the 30th, Meta BioMed was trading at 4,475 KRW, up 4.92% (210 KRW) compared to the previous trading day.

Meta BioMed is a manufacturer of dental medical materials such as root canal filling materials and restorative materials needed to treat dental caries, as well as biodegradable sutures (dissolvable threads) used for post-surgical stitching.

The company's main product, sutures, is primarily used in aesthetic lifting threads and surgical medical devices. Jo Jeong-hyun, a researcher at Hana Securities, explained, "The market for biodegradable sutures is oligopolistic, dominated by about seven global companies including Meta BioMed, making the entry barriers high."

In the second quarter of 2023, the company recorded sales of 19.7 billion KRW and operating profit of 3.7 billion KRW. The operating profit margin improved from 14.9% in the first quarter to 18.8% in the second quarter.

Researcher Jo analyzed, "Following deferred demand after COVID-19 and expansion of overseas clients, orders for sutures surged from global customers mainly in Europe, China, and the United States," adding, "To meet demand, the new factory started in June last year has been completed." He continued, "With the expansion, suture production capacity will increase by more than 30%, from 150,000 km annually last year to 200,000 km this year," and added, "Profitability has continued to improve following the acquisition of the materials company Cure Biochem last year."

It is estimated that this year’s sales will reach 82.3 billion KRW and operating profit 14.2 billion KRW, representing increases of 19.3% and 165.9% respectively compared to last year. Next year, sales are expected to grow by 17.2% to 96.5 billion KRW and operating profit by 38.7% to 19.7 billion KRW.

Researcher Jo said, "The current stock price level corresponds to a price-to-earnings ratio (PER) of only 7 times based on the expected 2024 earnings," adding, "This highlights the undervaluation attractiveness compared to the average PER of 17.5 times for domestic medical device companies."