[Alpha Biz= Kim Jisun] Dentium, a leading South Korean dental implant manufacturer, is grappling with weakening profitability and slowing growth. Following a decline in earnings last year, the company is expected to face another year of contraction in 2024, as implant demand in its core markets—China and Korea—remains subdued.
According to the Korea Exchange, Dentium’s shares closed at KRW 57,500 on September 25, down 7.6% year-to-date. This decline comes despite the KOSPI hitting record highs, underscoring investor concerns over the company’s earnings outlook.
In 2023, Dentium reported revenue of KRW 407.8 billion, marking a new record, but operating profit fell 28.8% year-on-year to KRW 98.5 billion. Operating margin dropped to 24%, compared to 35% in the previous two years. The downturn was driven by underperformance in China and a shift toward lower-margin products.
The slowdown has become more pronounced in 2024. In the first half, revenue fell 18.2% year-on-year to KRW 159.1 billion, while operating profit plunged 46.5% to KRW 25.1 billion. Operating margin contracted further to 15.8%. The decline was attributed to weaker domestic and Chinese demand, intensified competition, and higher selling and administrative expenses.
Dentium’s growth trajectory has also cooled, with annual revenue growth slowing from 27% in 2021 to just 4% in 2024. Analysts from Mirae Asset Securities noted that “Dentium has now posted three consecutive quarters of negative growth, largely due to weakness in China, which historically accounted for more than 50% of its revenue.” They added that although the Chinese market may show some recovery in the second half, “a strong rebound appears unlikely,” citing high treasury stock ratios, heavy dependence on China, and uncertainties in new business areas such as fuel cells.
Despite current challenges, Dentium emphasized that it remains committed to restoring growth. “Declining demand, reduced sales leverage, rising expenses, and currency fluctuations weighed on performance,” the company said. “We plan to strengthen our localization strategy in China, expand our presence in Southeast Asia—including Vietnam—and enhance domestic supply chain sales efforts.”
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
