[Click eStock] "Dentium Secures Stake by Activist Fund... Positive Signal"

On the 1st, Samsung Securities analyzed that the activist fund Align Partners securing a stake in Dentium could have a positive impact on the stock price.

The day before, Align Partners disclosed that it had acquired a 7.17% stake in Dentium through on-market purchases from March 21 to 28. The acquisition price ranged between KRW 64,190 and KRW 78,776 per share. Dentium’s stock price rose about 5%, increasing from the Korea Exchange closing price of KRW 71,100 to KRW 74,600 in the aftermarket.

Regarding this stake acquisition, Samsung Securities analyst Jeong Donghee stated, “Considering the nearly two years of prolonged stock price weakness, this is a positive event,” but also cautioned, “It is necessary to confirm specific shareholder actions and be aware of increased stock price volatility.”

Align Partners specified the purpose of holding Dentium shares as “general investment purpose.” General investment purpose does not directly influence management control but allows for active shareholder engagement. Consequently, there is growing interest in what specific shareholder actions Align Partners will take in the future. Analyst Jeong noted, “Since general investment purpose can include more active shareholder activities compared to simple investment, it is important to watch their future moves.”

Dentium recorded a stock price peak in early 2023 due to expectations of the Chinese government’s implementation of VBP (Volume-Based Procurement), but subsequent slowdown in Chinese consumer demand and intensified competition in first-tier cities caused its earnings growth to fall short of expectations. Additionally, despite holding more than 22% of its own shares, Dentium has shown a passive stance on shareholder return policies utilizing these shares, reflecting a lack of active stock price management.

Analyst Jeong assessed, “Dentium’s stock price has fallen to historically low valuation levels as of early 2025,” and added, “The involvement of an activist fund could provide an opportunity for a stock price rebound.” However, he also warned, “Until a fundamental earnings improvement strategy emerges, there is a risk of increased stock price volatility.”

Furthermore, Analyst Jeong stated, “Since fluctuations in earnings variables have not been confirmed, we maintain the 12-month forward EBITDA-based target price and investment opinion,” adding, “There is potential for re-rating depending on improvements in the company’s operations and shareholder return activities going forward.”