[Reporter Reading Securities Report] Why Rokit Healthcare Expects an Average Annual Growth of 66%

Company with AI Hyper-Personalized Long-Term Regeneration Platform
Average Annual Growth of 66% Expected from 2025 to 2027
"Long-Term Regeneration, Export Expansion Forecast"

Rokit Healthcare has submitted a securities registration statement and officially launched its initial public offering (IPO). Although the company has been recording losses, its average annual growth rate over the past three years is 19.63%. However, it expects to achieve an average growth rate of 66% from this year through 2027. This is because overseas sales of its core long-term regeneration platform business are expected to accelerate.

Rokit Healthcare is a company that develops and supplies advanced regenerative medical solutions such as diabetic foot treatment, skin regeneration, cartilage regeneration, and kidney regeneration, based on its technology of AI hyper-personalized customized long-term regeneration platforms. Its skin regeneration platform technology integrates AI-based 3D printing technology with the patient's adipose tissue to provide personalized skin regeneration. By utilizing AI software and medical 3D bio-printers, it produces necessary wound patches or organs for patients to aid treatment. For the intractable disease diabetic foot, clinical trials have been conducted in countries including India, South Korea, the United States, and Turkey.

Based on its technological capabilities and clinical results, the company has obtained medical device registrations and approvals in various countries, including the U.S. Food and Drug Administration (FDA) and the European Medical Device Regulation (CE MDR). Leveraging this, it has signed sales contracts targeting 44 countries and is expanding exports.

Rokit Healthcare is aiming to enter the KOSDAQ through a technology growth special case. Due to the nature of this special case, many companies continue to operate at a loss, and Rokit Healthcare is no exception. Consolidated sales revenue was KRW 9.15088 billion in 2022 and increased to KRW 13.09669 billion last year (preliminary settlement). During the same period, operating losses decreased from KRW 13.87825 billion to KRW 4.88757 billion. The compound annual growth rate (CAGR) of sales during this period was approximately 19.63%.

Since the company is operating at a loss, it calculated its desired public offering price based on future performance. This year’s expected sales revenue is KRW 23.756 billion, with an operating profit of KRW 1.679 billion. Compared to the previous year, sales are projected to increase by 81.38%, and operating profit is expected to turn positive. The forecasted sales revenue and operating profit for 2027 are KRW 65.517 billion and KRW 26.987 billion, respectively. The average annual growth rate from 2025 to 2027 is 66.06%.

For reference, the company and the underwriters estimated sales based on a conservative scenario. Under an optimistic scenario, the expected sales revenue for 2027 is KRW 91.724 billion.

The reason the company anticipates high growth starting this year is the expansion of exports in the long-term regeneration platform sector. Rokit Healthcare explained in its securities registration statement, "Based on global sales contracts, we have annual kit sales plans by country," and "Through this, we predict medical device certification procedures by country, hospital networks, market conditions, and clinical outcomes."

The lead underwriter, SK Securities, used the price-to-earnings ratio (PER) to calculate the desired public offering price. Applying the average PER of 23.38 times from three comparable companies?Osteonic, T&L, and Pharma Research?and the estimated net income of KRW 20.363 billion in 2027, they derived a per-share valuation of KRW 16,990. After applying a discount rate of 23.50% to 35.00%, the desired public offering price was set between KRW 11,000 and KRW 13,000.

Rokit Healthcare plans to offer a total of 1.56 million shares, aiming to raise between KRW 17.16 billion and KRW 20.28 billion. Based on the lower end of the offering price, KRW 8.194 billion will be invested in research and development (R&D), KRW 1.5 billion in global marketing, KRW 5.382 billion in raw material purchases and other expenses, and KRW 1.6 billion will be used for additional personnel recruitment.