[Click e-Stock] "Classys on the Offensive" Target Price Raised to 78,000 Won

On May 13, Kiwoom Securities raised its target price for Classys from 67,000 won to 78,000 won, stating that the company's growth momentum remains strong.

Classys operates the aesthetic medical device business under the 'Classys' brand, the beauty device business under the 'Cluederm' brand, and the personal beauty device and cosmetics business under the 'ShrinK RX/Skederm' brands, with a presence in more than 80 countries worldwide. As the cumulative number of units sold and usage counts of its main products increase, essential consumables required for operating these devices have established themselves as a distinct product category. As of the end of last year, the sales composition of devices and consumables stood at approximately 46% and 45%, respectively.

Through its merger with Ilooda in October last year, Classys secured technological competitiveness in the skin and aesthetic medical device market, expanding beyond its existing business areas of High-Intensity Focused Ultrasound (HIFU) and Monopolar RF (MRF) to include Microneedle RF (MNRF) and Laser (LASER) technologies.

The previous day, Classys announced its preliminary consolidated financial results for the first quarter, reporting sales of 77.1 billion won and operating profit of 38.8 billion won. Compared to the same period last year, sales surged by 53.1% and operating profit by 46.3%.

Kiwoom Securities analyzed, "Sales exceeded market expectations by 4%, and operating profit by 7%. The proportion of consumables sales was high at 52.6%, resulting in a gross profit margin of 79.5%." The firm added, "From the second quarter, the growth in equipment sales is expected to stand out, driven by new product launches and regional expansion. Consumables are also experiencing significant growth both domestically and internationally."

Kiwoom Securities forecasts that Classys' annual sales this year will reach 357.9 billion won, with operating profit at 173.2 billion won, representing year-on-year increases of 47.3% and 41.4%, respectively. Analyst Shin Minsu stated, "Although depreciation expenses related to the merger will increase by 2 billion won per quarter, advertising and R&D expenses are expected to be executed at a similar budget level as last year, so there should be no difficulty in improving the annual operating margin."