[Hidden Market Picks] Dentium: Rosy 2018 earnings on dental care coverage expansion

2018.01.16 15:51:52 | 2018.01.25 11:29:47

To meet growing interest and demand in Kosdaq, venture, and smaller-cap shares in Korea, Pulse will supply news and information on relatively lesser-known stocks to our readers with the help of our analysts` pool.

We will filter out three or more stocks from analysts reports weekly and add data from Financial Services Commission and Korea Exchange to better help investors` judgment.

**The Maeil Business Newspaper and Pulse do not take responsibility for any investment choices based on our tips.

이미지 확대

Growth in earnings of Dentium (Kospi: 145720), No. 2 dental implant provider in South Korea, is expected to pick up speed this year led by expanded dental care coverage at home and solid implant demand abroad with many countries entering aging or aged societies.

Dentium is estimated to have earned 39 billion won ($36.7 million) in operating profit on sales of 151 billion won in full 2017, according to Korea Investment & Securities Co. In 2018, its operating profit and sales are forecast to reach 49 billion won and 184 billion won, respectively.

The company had a stellar year in 2016 when its sales grew 15 percent on year thanks to the country’s dental care reform in the latter half of the year that expanded implant coverage up to age 65 from previous 70. Compared with a year ago, Dentium is, however, expected to see a 4-percent fall in sales in the fourth quarter of 2017 in an absence of additional coverage expansion. Still, the company is forecast to report 9.5 billion won in operating profit for the quarter ended December, more than doubled from a year ago period as a 39 percent on-year increase in exports would have more than offset the slowdown in local sales.

In particular, outbound shipments to Russia and the United Arab Emirates in the cited period were impressive. Dentium has been shipping its dental implants to 70 countries, and it currently controls the third largest market share in China.

Its earnings outlook for 2018 is upbeat thanks to the anticipated reform in the country’s dental care coverage, which will reduce the share of personal financial responsibility from 50 percent to 30 percent starting from July. As the second largest implant supplier with a market share of 15 percent at home, its domestic sales are forecast to rise 9 percent from 2017 on the new coverage plan. Exports are also expected to grow 29 percent to 128.6 billion won over the same period, driven by rising demand for implants in line with an increase in the number of aging or aged societies across the world.

Listed on the country’s main bourse Kospi in March 2017, the company’s price to earnings ratio (PER), which measures the stock price against a company’s earnings per share, is currently estimated at 19.8, undervalued compared with its foreign peers with PER of 28.9 on average.

Shares of Dentium Tuesday closed 2.03 percent up at 70,300 won from the previous session.

For more information, please contact Jin Hong-guk, analyst, Korea Investment & Securities at hg.jin@truefriend.com [mailto:hg.jin@truefriend.com] or visit Financial Supervisory Service (http://englishdart.fss.or.kr/).Company details and latest quarterly report (search code: DENTIUM or 145720). For latest trading data, please visit Korea Exchange (http://englishdart.fss.or.kr/) and search under DENTIUM or 145720.

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]