Koh Young Technology, a medium-sized company that manufactures three-dimensional (3D) inspection equipment, has seen its stock price surge by about 64% since January of this year. When news broke on the 20th that their medical robot, touted as a new source of revenue, was making strides toward entering the U.S. market, the company's stock hit the upper limit the same day and rose an additional 19.3% the following day on the 21st.
The company has received final approval from the U.S. Food and Drug Administration (FDA) for its self-developed medical robot for brain surgery. This day coincidentally marked the inauguration of President Donald Trump. With the Trump administration focusing on reshoring manufacturing, securities analysts are optimistic about Koh Young Technology's prospects.
Founded in 2002 by CEO Koh Kwang-il, a pioneer in robotic research, Koh Young Technology produces inspection equipment for electronics and semiconductors, primarily supplying manufacturers in related industries such as mobile devices, automotive electronics, and semiconductor production. This equipment is used to measure soldering conditions and component connections. It holds the world market share of 1.
Utilizing accumulated technologies in optics (the study of electromagnetic wave properties), mechatronics (the fusion of mechanical and electronic engineering), software, and artificial intelligence (AI), the company has ventured into the medical equipment market to develop the 'Caimero,' a robotic system for brain surgery. It obtained manufacturing and sales approval from the Ministry of Food and Drug Safety in 2016 and has since been recognized for its technological prowess, being utilized in over 500 surgeries across six major hospitals nationwide.
The surgical robot developed by Koh Young Technology serves a function similar to navigation, tracking surgical tools in real time and guiding the surgical site. It is evaluated as presenting a new paradigm in brain surgery by enhancing surgical accuracy and increasing success rates while reducing patient pain and the risk of complications.
While the Da Vinci robotic system, which allows surgeons to conduct remote operations using a console through small holes drilled into a patient's body, is widely applied in the general surgery market, the introduction of robots into neurosurgery, including brain and spinal operations, is still in its infancy. The company estimates that the global market for neurosurgery robots will grow from about 2 trillion won in 2021 to approximately 5 trillion won by 2028.
The United States is identified as having significant growth potential, with over 1,400 hospitals capable of conducting brain surgery.
With the recent FDA approval, Koh Young Technology aims to sell more than 10 robots in the U.S. market this year. The average selling price (ASP) is estimated to be about $1 million, and if the company's aggressive sales targets are met, it could realize an additional $10 million in revenue. The recent strong U.S. dollar, with the won falling above the 1,400 won range, is expected to contribute to increased sales.
The industry is closely observing how the performance in these new businesses will compensate for recent weak results. Until last year, the company had to endure the fallout from downturns in related industries such as semiconductors and automotive electronics. The overall atmosphere had been one of reducing facility investments and postponing the purchase of inspection equipment, except for artificial intelligence (AI) and some Taiwanese clients.
According to financial data firm FnGuide, Koh Young Technology is expected to generate only 20.5 billion won in revenue in 2024. Operating profit is projected to drop to 9.9 billion won, half of the previous year's 20.4 billion won.
However, starting this year, revenue is expected to rise to about 23.88 billion won, an increase of 16%, with operating profit also anticipated to more than double to about 24.3 billion won.
Koh Young Technology is also preparing for approval from the Pharmaceuticals and Medical Devices Agency (PMDA) in Japan for its medical robot in the first half of this year, expecting that 2025 will mark the beginning of business expansion beyond South Korea to the United States and Japan.
Koh Young noted, "Our goal is to sell 20 units of Caimero globally this year, including in the U.S., and while the revenue contribution may be minimal, we expect it to reach 10 billion to 20 billion won (in 2025)."
The key issue lies in the inspection equipment market, which accounts for nearly 90% of total revenue. An industry insider in semiconductor equipment stated, "Since the Trump administration has just taken office, there is still no clear policy on semiconductors, leading to an atmosphere where related companies cannot make investment decisions regarding timing. The inspection equipment typically has shorter delivery times, so there is a slight lag from the time companies make investment decisions to when orders are placed. We will need to monitor the performance of our core business more closely."