[Click eStock] "D.O, Valuation Appeal Highlighted and Shareholder Returns Accelerated"

Lee Sangheon, a researcher at I Am Securities, analyzed in a report on the 25th that dental implant company Dio is expected to improve profitability through the full-scale growth of overseas sales, which will accelerate shareholder returns.

Dio recorded a 23.1% sales growth compared to the same period last year as domestic sales normalized in the fourth quarter of last year, achieving a turnaround to profit with consolidated sales of 37.8 billion KRW and operating profit of 400 million KRW.

The reason for the sales growth, according to the researcher, is not only the normalization of domestic sales but also the continuous growth trend of overseas sales. In particular, from this year, overseas sales growth is expected to accelerate through strengthening sales networks in China, India, and T?rkiye, along with the normalization of domestic sales, leading to accelerated profitability improvement from the first quarter.

For these reasons, Dio's first-quarter performance this year is expected to be consolidated sales of 39.5 billion KRW and operating profit of 4.8 billion KRW.

Additionally, following the conversion of capital reserves into retained earnings last year, shareholder return expansion such as treasury stock acquisition and cancellation, and dividend increases are also expected to accelerate this year. In August last year, Dio canceled 900,000 shares out of the existing 1,357,263 treasury shares. In September last year, through an extraordinary general meeting of shareholders, 78 billion KRW of capital reserves were converted into retained earnings, leading to the acquisition of 606,668 treasury shares worth 10 billion KRW, and the possibility of canceling the held treasury shares is also expected to increase this year.

Researcher Lee Sangheon stated, “Based on these retained earnings, the acquisition and cancellation of treasury shares and dividend increases will be utilized, accelerating shareholder return expansion this year,” and added, “Under an environment where valuation attractiveness is highlighted, the acceleration of shareholder return expansion will act as a momentum for Dio’s stock price increase.”