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Classys (Source: Classys) |
[Alpha Biz= Paul Lee] Daol Investment & Securities said on Wednesday that it has lowered its target price for Classys to 82,000 won from 84,000 won, citing a slight downward revision to earnings estimates due to delays in the acquisition of its Brazilian partner.
Classys’ fourth-quarter results for last year came in below Daol Investment & Securities’ expectations. Fourth-quarter revenue totaled 93.4 billion won, up 26% year on year and 13% quarter on quarter, while operating profit rose to 51.2 billion won, increasing 43% from a year earlier and 36% from the previous quarter. Despite the solid growth, both revenue and operating profit fell short of prior forecasts.
In the domestic market, equipment sales reached 12.5 billion won and consumables sales totaled 13.4 billion won. Equipment sales rose 32% year on year, but consumables sales declined 6%. While growth driven by the QuadSAY-based product launched in July last year remained positive, a reduction in the number of business days due to the Chuseok holiday led to the first year-on-year decline in domestic consumables sales since the second quarter of 2022.
Overseas, revenue from Brazil came in at 7.3 billion won, representing 38% quarter-on-quarter growth and a narrower year-on-year decline. The brokerage attributed the improvement largely to continued orders focused on consumables.
Profitability was partially supported by foreign exchange effects. The quarterly average won–dollar exchange rate rose to 1,449 won, offsetting the lower proportion of consumables in the sales mix. As a result, gross profit margin improved to 77.1%, up 0.3 percentage points year on year and 0.7 percentage points from the previous quarter.
However, an allowance for doubtful accounts of 4.4 billion won was recognized in the process of converting accounts receivable from Medsystems into loans. Including this charge, the operating profit margin stood at 54.8%, while excluding the one-off expense it was estimated at around 50.1%.
Classys failed to meet its full-year guidance despite a continued high exchange-rate environment in the third and fourth quarters. In particular, the year-on-year decline in domestic consumables sales growth after the second quarter was seen as disappointing, given the overall growth trend of South Korea’s medical aesthetics market.
Daol Investment & Securities said there was insufficient justification to present an organic growth rate of around 30% for this year. Excluding one-off reversal effects, operating profit was also assessed as falling short of expectations.
In the near term, the brokerage said it would be important to confirm whether domestic consumables sales return to growth starting in the first quarter of this year. Classys aims to complete the acquisition of its Brazilian partner by March and has already appointed local executives and begun pre–post-merger integration (pre-PMI) work.
The company is also pursuing a partnership in the United States for QuadSAY in 2026 and regulatory approval in China for Volnewmer in September. However, Daol Investment & Securities expects these events to translate into meaningful earnings improvement only from the second half of the year.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
