[Click eStock] "Lowered Annual Earnings Estimates... Dentium, Target Price Down"

On the 13th, LS Securities adjusted the target price for Dentium downward from 170,000 KRW to 130,000 KRW, stating that "the annual earnings forecast was lowered following the Q2 earnings announcement this year." The buy rating was maintained.

On the same day, Eun-ae Jo, a researcher at LS Securities, said, "The provisional Q2 sales amounted to 111.7 billion KRW, a 5% increase compared to the same period last year, while operating profit was 27.7 billion KRW, a 14% decrease, falling short of market expectations by 20% in terms of operating profit."

The company's total implant sales reached 98.8 billion KRW, with regional sales recorded as 58.5 billion KRW in China, 13.8 billion KRW in other parts of Asia, and 7.8 billion KRW in Russia. Sales in Russia were lower than expected due to the shipment of approximately 5 billion KRW being deferred to the second half of the year.

This year’s expected sales are projected at 447.5 billion KRW, a 14% increase from last year, while operating profit is expected to decrease by 5% to 131.7 billion KRW, with the operating margin declining by 5 percentage points to 29%. Researcher Jo explained, "As we enter the peak season, quarterly sales growth is expected to continue," adding, "a conservative cost outlook has been reflected in the forecasted results."

He added, "Quarterly sales growth in China, Dentium’s key market, and annual sales growth in Russia are expected to continue. Since a high market share is maintained in China, rapid earnings improvement is possible when the market conditions improve," but also noted, "to see a meaningful stock price rebound, confirmation of stabilization in quarterly margins and earnings volatility appears necessary."