[Click eStock] "Osteonic Enters Full-Scale Export Growth Phase"

On June 5, SK Securities analyzed that Osteonic is experiencing balanced growth across all product categories, driven by a full-scale expansion of overseas exports.

Heo Sunjae, a researcher at SK Securities, stated in a report on this day, "This year will mark the first year of a full-scale expansion of overseas exports," adding, "The projected revenue for 2025 is 45.1 billion KRW, which represents a 31.8% increase year-on-year. Operating profit is expected to reach 9.7 billion KRW, up 41.3% from the previous year, and the operating margin is forecast to reach 22%."

Osteonic's first quarter results this year showed revenue of 9.5 billion KRW, a 23.9% increase year-on-year, and operating profit of 1.5 billion KRW, up 29.3%. The operating margin was 15.7%. By product, Trauma recorded 4.0 billion KRW (up 32.8% year-on-year), Sports Medicine 2.7 billion KRW (up 8.4%), CMF 2.5 billion KRW (up 17.8%), and Spine and other products 0.3 billion KRW (up 400.0%), demonstrating balanced growth across all product lines.

Second quarter results are expected to show revenue of 10.5 billion KRW, a 21.4% increase year-on-year, and operating profit of 2.2 billion KRW, up 26.5%. In particular, in the Sports Medicine division, after obtaining FDA approval for 10 products in the fourth quarter of last year, Osteonic began full-scale sales in the United States from April this year through Zimmer, the world's second-largest orthopedic medical device company. The United States is the world's largest sports medicine market, valued at 32 trillion KRW.

Researcher Heo explained, "The ASP (average selling price) of Sports Medicine products supplied to Zimmer is more than twice as high as that in Korea, and since the major expenses required for expanding the product lineup and obtaining FDA certification were completed last year, the company is entering a phase of significant profit leverage driven by expanded exports to the US." As a result, Sports Medicine revenue is expected to grow rapidly from 4.8 billion KRW in 2022, to 8.3 billion KRW in 2023, 10.1 billion KRW in 2024, and 13.6 billion KRW in 2025.

The CMF division is also expected to show strong growth. Exports centered on Europe are underway through the German medical device company B. Braun, and after obtaining CFDA approval in the second half of this year, Osteonic is expected to begin entering the Chinese market as well. Researcher Heo said, "B. Braun plans to leverage the price competitiveness of Osteonic's products to penetrate the Chinese market through cross-selling with its own neurosurgical equipment and tools," adding, "CMF revenue is projected to increase from 7.0 billion KRW in 2022 to 14.1 billion KRW in 2025."

The Trauma division has also secured strong growth momentum. In the second quarter of this year, Osteonic completed FDA approval for its entire Trauma product line (about 900 products) and is preparing to enter the US market through an ODM supply contract with a global orthopedic medical device company. Researcher Heo stated, "Since Trauma was the company's main product category last year, accounting for the largest share (35%) of total revenue, it is expected to significantly contribute to top-line growth through exports to the US in the future." Trauma revenue is projected to grow from 7.9 billion KRW in 2022 to 15.5 billion KRW in 2025.

In addition, although still small in scale, the titanium spinal implant product launched in the fourth quarter of last year is also showing clear growth. This product is used for the treatment of degenerative diseases and disc injuries, recording 0.04 billion KRW in 2023, 0.37 billion KRW in 2024, and 0.15 billion KRW in the first quarter. This year, sales are expected to exceed 2.0 billion KRW.

Researcher Heo assessed, "From this year, there will be a full-scale expansion of export volumes by major product categories," and "The profit leverage effect from product competitiveness and expanded global partnerships will become fully apparent."