New Risk • May 21
New major risk - Revenue and earnings growth Earnings have declined by 16% per year over the past 5 years. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-₩11b free cash flow). Earnings have declined by 16% per year over the past 5 years. Minor Risk Market cap is less than US$100m (₩55.3b market cap, or US$36.7m). Announcement • Mar 13
DENTIS CO.,Ltd, Annual General Meeting, Mar 26, 2026 DENTIS CO.,Ltd, Annual General Meeting, Mar 26, 2026, at 10:00 Tokyo Standard Time. Location: auditorium, 6, yulam-ro, dong-gu, daegu South Korea Valuation Update With 7 Day Price Move • Mar 31
Investor sentiment deteriorates as stock falls 20% After last week's 20% share price decline to ₩6,220, the stock trades at a trailing P/E ratio of 32.3x. Average trailing P/E is 14x in the Medical Equipment industry in South Korea. Total loss to shareholders of 36% over the past three years. New Risk • Mar 26
New minor risk - Profit margin trend The company's profit margins are lower than last year and have reduced by more than 30%. Net profit margin: 2.6% Last year net profit margin: 4.1% This is considered a minor risk. A large drop in profit margin could indicate the company does not have strong competitive advantages or it is yet to establish itself and its core business. Even if it is a well established business, this may make it a much riskier investment than one that has a combination of proven competitive advantages and a stable or growing profit margin. Currently, the following risks have been identified for the company: Major Risk Debt is not well covered by operating cash flow (currently running at an operating cash loss). Minor Risks Profit margins are more than 30% lower than last year (2.6% net profit margin). Market cap is less than US$100m (₩110.0b market cap, or US$75.0m). Announcement • Mar 13
DENTIS CO.,Ltd, Annual General Meeting, Mar 27, 2025 DENTIS CO.,Ltd, Annual General Meeting, Mar 27, 2025, at 10:00 Tokyo Standard Time. Location: auditorium, 6, yulam-ro, dong-gu, daegu South Korea Reported Earnings • Nov 15
Third quarter 2024 earnings released: ₩180 loss per share (vs ₩96.00 profit in 3Q 2023) Third quarter 2024 results: ₩180 loss per share (down from ₩96.00 profit in 3Q 2023). Revenue: ₩29.7b (up 15% from 3Q 2023). Net loss: ₩2.75b (down 294% from profit in 3Q 2023). Over the last 3 years on average, earnings per share has increased by 48% per year but the company’s share price has fallen by 12% per year, which means it is significantly lagging earnings. Announcement • Aug 21
DENTIS CO.,Ltd announced that it expects to receive KRW 10.5 billion in funding DENTIS CO.,Ltd announced a private placement to issue Zero Coupon Series 3 Unregistered Non-Guaranteed Private Convertible Bonds due August 22, 2029 for the gross proceeds of KRW 10,500,000,000 on August 20, 2024. The transation will include participation from new inevstor NH-Mulim Dental Care New Technology Fund 1 for KRW 10,500,000,000. The bonds bear zero coupon rate, 3% maturity rate and matures on August 22, 2029. The transaction has been approved by shareholders, restricted to a hold period and is expected to close on August 22, 2024. The bonds are 100% convertible into 1,242,309 shares at a fixed conversion price of KRW 8,452 from August 22, 2025 to July 22, 2029. Reported Earnings • Aug 16
Second quarter 2024 earnings released: EPS: ₩242 (vs ₩109 in 2Q 2023) Second quarter 2024 results: EPS: ₩242 (up from ₩109 in 2Q 2023). Revenue: ₩30.4b (up 28% from 2Q 2023). Net income: ₩3.69b (up 137% from 2Q 2023). Profit margin: 12% (up from 6.6% in 2Q 2023). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 74% per year but the company’s share price has fallen by 12% per year, which means it is significantly lagging earnings. New Risk • Apr 08
New minor risk - Market cap size The company's market capitalization is less than US$100m. Market cap: ₩135.2b (US$99.8m) This is considered a minor risk. Companies with a small market capitalization are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. Currently, the following risks have been identified for the company: Major Risks Interest payments are not well covered by earnings (0.1x net interest cover). High level of non-cash earnings (43% accrual ratio). Minor Risks Share price has been volatile over the past 3 months (9.7% average weekly change). Shareholders have been diluted in the past year (7.4% increase in shares outstanding). Market cap is less than US$100m (₩135.2b market cap, or US$99.8m). New Risk • Sep 08
New minor risk - Shareholder dilution The company's shareholders have been diluted in the past year. Increase in shares outstanding: 7.0% This is considered a minor risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Major Risks Interest payments are not well covered by earnings (0.7x net interest cover). High level of non-cash earnings (26% accrual ratio). Minor Risks Share price has been volatile over the past 3 months (11% average weekly change). Profit margins are more than 30% lower than last year (0.5% net profit margin). Shareholders have been diluted in the past year (7.0% increase in shares outstanding). New Risk • Aug 30
New major risk - Earnings quality The company has a high level of non-cash earnings. Accrual ratio: 26% This is considered a major risk. Non-cash earnings can arise from many different things. However, if a company consistently has a high level of non-cash earnings, it may be a sign that they are recognizing revenue from customers before the full value of the sales are received as cash or they are not depreciating the value of their assets appropriately. These are practices that inflate earnings, while not providing a similar increase to cash flows. Companies in some select industries naturally have a high level of non-cash earnings and it is not a major concern. However, in the worst case scenario it can be an early sign of performance manipulation by management. Currently, the following risks have been identified for the company: Major Risks Interest payments are not well covered by earnings (0.7x net interest cover). High level of non-cash earnings (26% accrual ratio). Minor Risks Share price has been volatile over the past 3 months (11% average weekly change). Profit margins are more than 30% lower than last year (0.5% net profit margin). Valuation Update With 7 Day Price Move • Aug 18
Investor sentiment deteriorates as stock falls 15% After last week's 15% share price decline to ₩11,320, the stock trades at a forward P/E ratio of 12x. Average forward P/E is 14x in the Medical Equipment industry in South Korea. Total returns to shareholders of 34% over the past three years. New Risk • Jul 11
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of South Korean stocks, typically moving 11% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risks Interest payments are not well covered by earnings (1.5x net interest cover). High level of non-cash earnings (24% accrual ratio). Minor Risk Share price has been volatile over the past 3 months (11% average weekly change). Valuation Update With 7 Day Price Move • Jul 10
Investor sentiment improves as stock rises 33% After last week's 33% share price gain to ₩14,670, the stock trades at a forward P/E ratio of 15x. Average forward P/E is 13x in the Medical Equipment industry in South Korea. Total returns to shareholders of 47% over the past three years. Reported Earnings • Nov 16
Third quarter 2022 earnings released: EPS: ₩280 (vs ₩26.00 loss in 3Q 2021) Third quarter 2022 results: EPS: ₩280 (up from ₩26.00 loss in 3Q 2021). Revenue: ₩23.6b (up 57% from 3Q 2021). Net income: ₩3.97b (up ₩4.35b from 3Q 2021). Profit margin: 17% (up from net loss in 3Q 2021). The move to profitability was driven by higher revenue. Revenue is forecast to grow 30% p.a. on average during the next 3 years, compared to a 3.2% growth forecast for the Medical Equipment industry in South Korea. Reported Earnings • Dec 03
Third quarter 2021 earnings: EPS in line with expectations, revenues disappoint Third quarter 2021 results: ₩26.00 loss per share (up from ₩29.00 loss in 3Q 2020). Revenue: ₩15.1b (up 21% from 3Q 2020). Net loss: ₩380.5m (loss narrowed 81% from 3Q 2020). Revenue missed analyst estimates by 38%. Over the next year, revenue is forecast to grow 70% compared to a 1.7% decline forecast for the industry in South Korea. Is New 90 Day High Low • Feb 17
New 90-day high: ₩2,275 The company is up 28% from its price of ₩1,775 on 19 November 2020. The South Korean market is up 22% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Medical Equipment industry, which is up 11% over the same period. Is New 90 Day High Low • Feb 01
New 90-day low: ₩1,670 The company is down 2.0% from its price of ₩1,705 on 03 November 2020. The South Korean market is up 27% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Medical Equipment industry, which is up 6.0% over the same period. 