Kiwoom Securities said on the 4th that although sales growth at Dentium was disappointing, the company succeeded in controlling expense and lifting margins, adding that earnings growth this year looks possible. It maintained a Buy rating and raised its target price by 5.6% to 57,000 won. Dentium's previous closing price was 48,700 won.
Dentium's fourth-quarter results last year came in at 109.1 billion won in revenue and 25.6 billion won in operating profit. Revenue and operating profit fell 8.1% and 2.5% on-year, respectively, but beat the consensus (market average estimate).
Shin Min-su, an analyst at Kiwoom Securities, said, "While top-line growth was disappointing, improved manufacturing efficiency reduced the cost of goods sold ratio, and allowance for bad debts decreased by 2.1 billion won from a year earlier, lifting margins," adding, "In SG&A, recurring R&D expenses were 900 million won and advertising and promotion expenses were 6.6 billion won, contributing to margin improvement."
Kiwoom Securities said Dentium has reduced its reliance on China and that conditions remain solid in non-China markets such as Vietnam and Russia.
Shin said, "In addition, the stock price has fallen below the 0.8 price-to-book ratio (PBR) threshold set in the government's recently promoted 'stock-price suppression prevention law,' creating valuation appeal."