[Click e-Stock] "Syntekabio Sees Full-Scale AI Healthcare Revenue... Data Center Services Also Becoming Visible"

On May 14, Eugene Investment & Securities analyzed Syntekabio, stating that artificial intelligence (AI) healthcare revenue is beginning to materialize and that the company’s data center services are also becoming visible.

Syntekabio announced its consolidated first-quarter results the previous day. The company reported revenue of 900 million KRW and an operating loss of 3 billion KRW. Compared to the same period last year, revenue increased by 13,881.7%, achieving its highest-ever sales, but the company continues to post losses. Park Jongseon, a researcher at Eugene Investment & Securities, commented, “Revenue far exceeded our estimate (revenue of 100 million KRW, operating loss of 3.3 billion KRW), but the operating loss was in line with expectations.”

There are two notable points in the first-quarter results. First, revenue from Syntekabio’s core business?its AI drug discovery platform?has started to become visible. The company offers three platform-based services: DeepMatcher® active compound screening service, DeepMatcher® lead compound optimization service, and NEO-ARS® neoantigen screening service.

Currently, revenue is being generated from the DeepMatcher® active compound screening service. Related revenue, which was around 100 million KRW annually in both 2023 and the previous year, surged to 840 million KRW in just the first quarter of this year. Park stated, “In conclusion, we expect annual revenue from the AI drug discovery platform to reach approximately 2.6 billion KRW this year.”

The second positive aspect is that revenue has also begun to be generated from data center services. Park noted, “While revenue is only just becoming visible, we expect demand to gradually increase.” Syntekabio is the only company in Korea to provide medical AI-dedicated ABS center services, offering data center and cloud services. This segment is also expected to see gradual external growth.

For the second quarter of this year, the company is expected to post revenue of 600 million KRW and an operating loss of 3.3 billion KRW. While revenue is projected to rise sharply year-on-year, losses are expected to persist for the time being. Park added, “Based on significant revenue growth across the company’s various services, we expect Syntekabio to achieve profitability by 2027.”

Meanwhile, Syntekabio holds several momentum factors that could drive its stock price higher. These include the full-scale realization of significant revenue growth in AI healthcare, the visibility of revenue from data center and cloud services based on Korea’s only medical AI-dedicated ABS center, and benefits from the FDA’s phased abolition of animal testing.