[Click eStock] "Wontech, Regrettable but Unchanged Growth Direction"

Samsung Securities analyzed on the 9th that Wontec, although somewhat disappointing, still maintains an unchanged growth direction.

Wontec's third-quarter sales increased by 29.3% year-on-year to 26.4 billion KRW, and operating profit rose by 19.5% to 9.5 billion KRW.

Jeong Donghee, a researcher at Samsung Securities, explained, "In addition to the traditional off-season effect in the third quarter, the slowdown in consumables sales growth was due to the entry of competing products accompanied by free tips in the RF (radio frequency) field and increased advertising expenses ahead of the launch of the new product OllisioX."

He stated, "Reflecting the decrease in consumables sales caused by intensified short-term competition in the domestic RF sector, we are lowering next year's operating profit estimates by 8.2% compared to previous forecasts. However, since the multiple change due to the change in the EBITDA (earnings before interest, taxes, depreciation, and amortization) calculation timing until the third quarter of next year is minimal, the target stock price is maintained at 13,000 KRW."

He also analyzed, "Since Solta Medica, the manufacturer of Thermage (non-invasive RF original equipment), maintains a consumables sales ratio of 70% and confirms solid demand for RF procedures, the growth potential of entry-level equipment in the overseas non-invasive RF market remains valid."

He added, "Wontec has momentum for new market expansion through rapid follow-up product launches to defend domestic competition and approval for Ollisio in Brazil/China (within this year) in the first quarter of 2024."