[Click eStock] "Biol, Outstanding Technology Drives Earnings Growth... Target Price Up"

Hana Securities on the 25th raised the target price of Biol to 12,500 KRW, stating that its unique technology will continue to drive external growth.

Kim Seong-ho, a researcher at Hana Securities, said in a report on the day, "Biol obtained approval from China's NMPA for its main equipment, 'SilfirmX,' on the 22nd," and "Sales of beauty device equipment for the Chinese market are expected to start in earnest from the second quarter."

Biol signed a 5-year supply contract worth 18 billion KRW related to SilfirmX with China's Sichuan Pharmaceutical Group in 2022, and the related sales are expected to be reflected in the performance from the second quarter of this year. Although the annualized amount reflected in yearly performance is not large, attention should be paid to the potential expansion of SilfirmX into the Chinese market in the future.

He also explained, "In March last year, Biol filed ITC lawsuits against 10 domestic and international companies regarding micro-needle RF patent infringement, and currently has reached agreements with seven companies, including Iruda and Lutronic," adding, "The fact that agreements have been made with seven companies mid-process sufficiently proves Biol's technological moat."

Furthermore, Biol began receiving settlement and license fees from the first quarter of this year, and the settlement related to Iruda is expected to be completed by the second quarter. Considering that Biol's patent is valid until 2036, it is judged that the company will continue to expand its market share in the North American market without any technical issues in the future.

He said, "The points to watch for Biol this year are the entry into new countries including China and Brazil, and the momentum from new product launches," and "With the certification of SilfirmX obtained at the end of last year, entry into the Brazilian market has begun, and shipments are expected to accelerate from the second half of this year."

He added, "In the past, there was a perception that the company's sales growth was not as high as expected, but from the second half of this year, with the full reflection of new country entries and new product effects, those concerns are expected to be gradually resolved."