Shinhan Investment & Securities said on the 28th that additional share-price correction for CLASSYS(214150) would likely be limited and that investors should focus on second-half overseas momentum. It maintained a "Buy" rating and a target price of 62,000 won. CLASSYS closed at 32,300 won the previous day.
Shinhan Investment & Securities said the third quarter will be the key watch point for CLASSYS and noted that lowered expectations are already reflected in the share price. It especially expected a normalization of operations in South America in the third quarter to trigger a rebound in the stock.
CLASSYS's revenue in the second quarter of this year was 105.5 billion won and operating profit was 43.9 billion won. They rose 26.7% and 2.2%, respectively, from a year earlier, but fell short of the consensus.
Kim Ji-young, an analyst at Shinhan Investment & Securities, said, "It was due to delays in post-merger integration (PMI) after the Brazil acquisition and a slowdown in domestic demand," adding, "Also, reflecting the time needed to build the sales network following this month's shift to 100% direct operation in Japan, we lowered this year's revenue guidance to 430 billion to 460 billion won."
However, it said attention should be paid to solid growth overseas going forward. Quarterly equipment sales in Europe increased from 300 units in the first quarter of this year to 450 in the second quarter. In North America during the same period, they rose from 110 to 150.
Kim said, "Additional expansion momentum remains valid with approvals in China (MRF) by year-end and in the United States and China (HIFU) in the first quarter of next year," adding, "In Brazil, although local revenue was 21.3 billion won in the second quarter, with the World Cup effect fading and stronger marketing, revenue is expected to enter a normalization phase from the third quarter."
In particular, CLASSYS's share price is down 58% from its previous peak. The 12-month forward price-earnings ratio (PER) is about 11.5 times.
Kim said, "Overseas accounted for 79% in the second quarter of this year, and while large markets such as the United States and Europe are performing well and new launch momentum in China and the United States remains valid, the stock reacted excessively to the domestic slowdown," adding, "With expanded marketing for combination treatments in the second half and accelerated rollout of new products in the medium to long term, domestic demand is expected to gradually rebound in the fourth quarter."
Kim added, "If normalization of Brazil revenue is confirmed in the third quarter, investor sentiment is expected to recover," noting, "The potential addition to the KOSDAQ premium league in early 2027 is also a factor for improving investor sentiment."