DAISHIN SECURITIES analyzed that although Dentium is experiencing poor performance, the high proportion of treasury stocks could serve as a catalyst for shareholder returns through stock buybacks and increased dividends. They adjusted the target stock price downward from 120,000 won to 90,000 won but maintained the investment opinion of 'buy.' The closing price of Dentium on the previous trading day was 61,200 won.
Dentium recorded sales and operating profit of 76.8 billion won and 9.6 billion won, respectively, in January this year, a decrease of 7.1% and 50% from the previous year. It recorded its lowest profit margin since the COVID-19 pandemic.
Han Song-hyup, a researcher at DAISHIN SECURITIES, said, "Due to inventory adjustments and consumption contraction, sales to China plummeted by 21% compared to the previous year," adding, "The impact of reflecting bad debt expenses of 3.1 billion won while handling overdue receivables is also significant."
DAISHIN SECURITIES projected that Dentium's sales would increase by 1.8% to 415.3 billion won and that operating profit would decrease by 13% to 85.6 billion won compared to the previous year. One researcher explained, "If the import and export data for implants in the second half turn to growth and the proportion of implants increases, cost rate improvements will be possible," but noted, "However, due to the unexpectedly sluggish Chinese implant market and the upcoming second centralized purchasing (VBP) bid in China, a conservative stance is advisable."
However, despite the poor performance, there is momentum for enhancing corporate value. The activist fund Align Partners disclosed that it purchased a 7.17% stake in Dentium on the market in March this year. One researcher noted, "The market expects that Align's buyback of 22% of its treasury shares and an increase in its dividend policy will trigger a scenario of enhancing return on equity (ROE)."
He added, "Dentium's performance is somewhat stagnant, but the pressure for governance improvement itself provides immediate positive momentum for the stock price," noting, "In fact, looking at examples of other domestic listed companies, when activism determines the dividend policy or scale of buybacks, the stock price tends to soar."