[Hidden Market Picks] Vatech poised to become global leader in dental x-rays

2018.02.07 14:57:19 | 2018.02.08 09:24:38

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Vatech Co.(Kosdaq: 043150), a South Korean company specializing in dental x-ray systems, is rapidly expanding its share in the world market as it bolsters its dominance in major countries with the launch of 3D x-rays and environmentally-friendly products.

For full 2017, the company is estimated to have earned 39 billion won ($36.1 million) in operating profit and 219 billion won in sales, according to Kyobo Securities Co. on Tuesday. It is projected to grow further this year with an operating profit of 45 billion won on sales of 245 billion won.

Vatech’s share has been growing sharply in the global dental x-ray market, rising two notches to take the third place in 2017 from the previous year. Buoyed by the success of its new 3D x-rays, it is quickly closing the gap with the global top two and is well poised to claim the No. 1 spot, according to the Korean brokerage.

The firm is also seeing a boost in sales with the global roll-out of its x-ray system that allows 2D and 3D imaging in a single scan, which first hit Europe in 2015 and North America in 2016. It also aims to appeal to the North American market through environmentally-friendly products launched last year.

To target China’s growing premium dental device market, the Korean company plans to introduce a new product upon gaining approval from authorities by the end of the year to further cement its market dominance.

Vatech, which already earns more from foreign markets than the Korean market, is set to expand its global presence even further. For the cumulative nine months ended September 2017, it generated 20 percent of sales from Korea, 17 percent from Asia excluding Korea, 25 percent from North America and 22 percent from Europe.

It is currently the No. 1 dental x-ray supplier in Germany and France as well as in China and India.

Kyobo Securities raised its target price for Vatech from 39,000 won 47,000 won. Its price earnings ratio, or PER, in 2018 is 16.4x, lower than past averages which have ranged in the 20s and 30s, indicating the stock may be undervalued.

Shares of Vatech ended Wednesday up 2.62 percent at 37,150 won.

For more information, please contact Lee Yoon-sang, analyst at Kyobo Securities at (+82 2 3771 9287, ysanglee@iprovest.com) or visit Financial Supervisory Service (http://englishdart.fss.or.kr/). Company details and latest quarterly report can be searched under ValueAddedTechnology or 043150.

Latest trading data is available via Korea Exchange (http://englishdart.fss.or.kr/) under ValueAddedTechnology or 043150.

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