[Click e-Stock] "Meta Biomed Expected to Achieve Record Performance Since Founding... An Undervalued Leading K-Medical Stock"

On July 30, Hanyang Securities projected that Meta Biomed would achieve its highest-ever performance since its founding, driven by growth in its core business and expansion into new ventures. Nevertheless, the analysis indicated that the company remains undervalued.

Meta Biomed is a specialized company producing dental materials and devices, biodegradable suture threads, and medical device products. It was listed on the KOSDAQ market in April 2008. The company is considered an undervalued stock in the medical aesthetic device sector compared to its performance and growth potential.

As of the first quarter of this year, the business composition is 49.4% dental division, 42.9% suture division, and 7.7% other. In particular, the dental division holds the number one position globally in the field of root canal filling materials, while the suture division maintains a market share of approximately 2?3% in the global oligopoly market. Ninety percent of suture sales come from exports, and the company is focusing on expanding its overseas dealership network based on its price competitiveness.

Lee Joonseok, a researcher at Hanyang Securities, stated, "In addition to the Osong headquarters, Meta Biomed operates a production subsidiary in Vietnam and sales subsidiaries in the United States, China, and Germany, thereby establishing a global network." He added, "Recently, the company invested 7 billion KRW to build a second factory in Osong with a size of approximately 4,500 pyeong. This is a strategic investment to prepare for the increasing demand for sutures and the full-scale launch of new cosmetic and medical businesses starting next year."

The company's flagship product, sutures, are thread-type medical devices used to close incised tissue after surgery. In particular, synthetic biodegradable sutures have the advantage of naturally decomposing in the body, eliminating the need for removal. Due to concerns over animal diseases such as mad cow disease, the use of natural sutures is decreasing, and the demand for absorbable products is structurally increasing.

The global suture market, which was worth approximately $5.7 billion last year, is expected to grow at an average annual rate of 6% until 2030. Meta Biomed's suture sales are also projected to grow at an average annual rate of 24%, from 20.1 billion KRW in 2021 to 47.5 billion KRW in 2025. Lee added, "Recently, the average operating rate for suture production has exceeded 94%, making expansion urgent. This demonstrates that actual demand is increasing rapidly."

Meta Biomed's projected performance for this year is sales of 108.1 billion KRW and operating profit of 21.1 billion KRW, with an operating margin expected to reach 19.5%. In addition to sutures, the dental division is also operating at maximum capacity, and sales are expected to expand after the second factory is completed. Notably, the new facility will include automated production lines, which are expected to reduce costs and stabilize quality.

Lee emphasized, "From next year, both margin improvement and external growth will be possible." He continued, "Currently, the stock is trading at a 12-month forward price-to-earnings ratio (PER) of 6.7 times. Considering the effect of corporate tax reduction, the company is significantly undervalued." He also stated, "There is room for a valuation rerating through improved net profit profitability and free cash flow."