‘Profit Margin 63%’ Biol Forecasts Record-Breaking Performance for Q4

Successful Penetration of Asian Market... Sharp Increase in Performance
New Product FDA Approval Expected... Positive Outlook for Next Year

ViOL, a specialized medical device company for skin beauty, recorded an operating profit in the third quarter that exceeded market expectations. Securities firms expect ViOL to set a new quarterly record in operating profit again in the fourth quarter of this year.

According to the financial investment industry on the 13th, ViOL posted sales of 14 billion KRW and an operating profit of 8.9 billion KRW in the third quarter, marking increases of 28.4% and 39.1% respectively compared to the same period last year. The operating profit exceeded the consensus (average market forecast) by 7.2%. The operating profit margin remained high at 63.4%.

The secret to the high operating profit margin is analyzed to be the continuous improvement of gross profit margin through automated processes. Additionally, a light labor cost structure with 63 employees and limited room for increased selling and administrative expenses were also cited as reasons.

Looking at each business segment, sales increased in both equipment and consumables. First, ViOL’s flagship product, SilfirmX, recorded sales of 6.8 billion KRW, a 32% increase compared to the same period last year. Although the recovery of orders in the U.S. market was slower than expected, sales in Asia offset this. After receiving approval from China’s National Medical Products Administration (NMPA) in March, aggressive sales by partner company Sahwan Pharmaceutical increased sales in China, and steady growth is ongoing in several Asian countries including Japan, Hong Kong, Singapore, and Indonesia.

Also, consumables, which have a relatively higher profit margin, posted sales of 5.3 billion KRW, a 60% increase compared to the same period last year. Consumables also drove overall sales growth due to a surge in sales in the Asian region. In particular, in Japan, where there was previously strong resistance to invasive procedures, sales are increasing as awareness of microneedle radiofrequency (RF) treatments rises.

Minsoo Shin, a researcher at Kiwoom Securities, said, “Despite no technology transfer income from the patent lawsuit with JC’s Medical this quarter, ViOL recorded a quarterly operating profit margin of 63%, setting a new record. Overall, while the U.S. market is facing difficulties, strong performance in Asia, including China and Japan, is leading company-wide growth.”

Experts expect ViOL to achieve its highest quarterly performance again in the fourth quarter of this year, driven by growth in the Asian region.

Jieun Kim, a researcher at DB Financial Investment, forecasted, “Sales in the fourth quarter will reach 17.8 billion KRW, a 54.3% increase compared to the same period last year. Although sales targeting the U.S. market are slowing down, strong sales in China will continue to drive overall sales growth.”

Uiseop Shim, a researcher at NH Investment & Securities, said, “In the fourth quarter, seasonal peak effects along with continued strong sales in Asia will lead both equipment and consumables to set new quarterly records again. The high-intensity focused ultrasound (HIFU) new product ‘Duotight’ is scheduled to launch in Japan this month, and the non-invasive RF new product ‘Cellinew,’ launched domestically in June, is expected to receive U.S. FDA approval next year. Therefore, next year, strong growth will continue with SilfirmX’s momentum centered on Asia, combined with new product achievements.”