Graphy Rebounds Strongly After Nightmare Debut on KOSDAQ

Entered KOSDAQ on August 25 This Year at an IPO Price of 15,000 Won
Stock Fell 24.9% Below IPO Price on First Day of Trading
Profit Expected to Turn Positive Next Year, Marking the Start of Significant Earnings Growth

The stock price of Graphy, a developer of 3D printing-based clear aligners, has continued its rebound. Expectations for improved performance are rising as the company begins to expand its overseas business in earnest.

According to the financial investment industry on November 5, Graphy's stock price rose by 53.2% in 15 trading days after hitting its post-listing low of 8,210 won on October 14.

Previously, Graphy entered the KOSDAQ market on August 25 with a public offering price of 15,000 won. On the day of listing, the stock price fell 24.9% compared to the offering price. Since then, the stock price continued to decline, dropping to the 8,000 won range within two months. Since its listing, the stock has never traded above its offering price for a single day.

As the stock price fell to about half of the offering price, analysts began to point out that the decline was excessive compared to the company's growth potential.

Kim Sunghwan, a researcher at Bookook Securities, explained, "Due to the nature of the business, there is a significant initial fixed cost burden from overseas conferences and customer acquisition," adding, "The ratio of selling, general, and administrative expenses to sales is expected to fall from 104% last year to 63% this year." He also predicted, "Next year, sales will increase by more than 50% compared to this year, and operating profit will turn positive."

Founded in 2017, Graphy is a company that manufactures orthodontic devices based on shape-memory materials. The orthodontic market is divided between bracket braces and clear aligners. While brackets account for about 70% of the total market, the market share of clear aligners, which are more aesthetic and convenient, continues to rise. Graphy entered the clear aligner market based on its shape-memory materials.

Bracket braces offer strong corrective force but lack aesthetics and convenience. Clear aligners are more aesthetic and convenient but have relatively weaker corrective force. Shape-memory orthodontics combine the advantages of both brackets and clear aligners, and are expected to have strong market penetration.

Graphy plans to use the funds raised through its initial public offering (IPO) to accelerate its entry into overseas markets. The company aims to establish a local subsidiary in the United States within the year and rapidly expand its presence in the North American market by highlighting its product functionality.

Kim Hakjun, a researcher at Kiwoom Securities, analyzed, "The North American market is particularly significant in the global orthodontics industry, accounting for 45% of the total market and seeing a large number of new orthodontic patients each year." He added, "Given that Graphy has supplied around 2,100 nitrogen curing machines, which are essential equipment for shape-memory orthodontics, the company is expected to continue expanding steadily in the orthodontics market."