[Click eStock] Classys, High Growth Expected This Year... Target Price Raised

Korea Investment & Securities raised the target price for Classys from 60,000 KRW to 67,000 KRW on the 10th, citing expected high growth this year due to expanded sales in the US and Europe and entry into China. The investment rating was maintained as a buy. Classys' closing price on the 9th was 52,600 KRW.

In a report released that day, Si-on Kang, a researcher at Korea Investment & Securities, explained, "We raised the target price to 67,000 KRW by applying a 33x upper PER multiple for 2024 to the 12-month EPS of 2,033 KRW. Growth secured by expanded US/Europe sales in 2025, US HIFU and China HIFU/RF market entry in 2026, and new HIFU product launches in 2027 is expected to justify the valuation premium."

Classys' consolidated Q4 earnings are forecasted to show sales of 73.7 billion KRW, up 56.7% year-on-year, and operating profit of 35 billion KRW, growing 57.9% over the same period.

Researcher Kang stated, "With the completion of the Iruda merger in October last year, Iruda's results will start to be reflected from Q4. Currently, consensus estimates mix combined and non-combined results for Iruda, so direct comparison with consensus is not very meaningful."

He added, "Although a decline in profit margin is inevitable due to the inclusion of Iruda's results, the strong dollar and reduced advertising expenses relative to sales are expected to limit the decline, with an operating profit margin (OPM) of 47%."

Sales for this year are expected to grow 41.3% compared to last year, reaching 342.1 billion KRW, and operating profit is forecasted to increase 36.5% to 165.5 billion KRW, indicating high growth.

He analyzed, "Iruda's results will be fully reflected, and regionally, growth in the US and Europe is notable. In the US, sales will accelerate this year following the launch of Voluumer at the end of October last year. In Europe, CE MDR certification for Shrink Universe and Voluumer was completed in the first half, with plans to launch in the second half."

He also pointed out that sales growth of Voluumer consumables is a positive factor. Researcher Kang predicted, "Although consumables sales will account for only 9% of total sales in 2024, considering the average free tip usage period of 8 to 9 months, the transition from free to paid tips is expected to accelerate this year."