Medical device industry: silent growth even in a difficult environment

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The author is an analyst at NH Investment & Securities. He can be contacted at [email protected] — Ed.

Looking at January figures, toxin exports increased, with growth driven by sales from Daewoong Pharmaceutical to Evolus. After setting an all-time monthly record in December, exports of aesthetic medical devices remained robust despite entering weak seasonality. Defying market noise, dental medical devices also showed strong fundamentals.

Toxin: Daewoong Pharmaceutical’s Nabota exports to Evolus stand out

Exports of toxins (HS code: 3002.49.1000, 3002.90.9000) totaled US$20.14 million (+33.7% yy, -14.2% mm) in January. Exports to China, a major export market, fell 48.7% year-on-year, but this decline was offset by a sharp rise in exports to the United States.

According to customs data, Daewoong Pharmaceutical’s Nabota exports to its U.S. partner Evolus in January hit $7.17 million, a new monthly high. Daewoong Pharmaceutical presented a 2022 sales forecast for Nabota of around W100 billion, of which W50 billion is for Evolus. On January 26, Evolus presented sales forecasts of up to US$150 million (+50% YoY) for 2022. Although January’s strong exports reflect an inventory shortage situation at Evolus, we believe that Daewoong will be able to reach its annual sales forecast (50 billion W) from Nabota to Evolus this year. In particular, given that OPM on Nabota (based on exports to Evolus only) stands at 90%, an increase in exports is expected to strongly contribute to Daewoong Pharmaceutical’s overall OP this year (2021: OP of 95 .5 billion W)

Aesthetic medical devices: Exports to MDs are stable despite the counter-season

In January, exports of aesthetic devices (HS CODE: 9018.90) recorded US$57.3 million (+28.5% yy, -28.3% mm). It is positive that after hitting their highest ever monthly figure in December, exports have continued to show steady growth despite entering a low season. Overall growth was driven by higher exports to the United States ($12.01m; +100.6% yy, -23.1% mm), a key importer, and to France (4. $28 million; 132.5% yy, +38.8% mm). This positive result compensated for a weakening of exports to China (2.39 million dollars; -31.0% year-on-year, -68.5% in mm).

In January, Classys launched Shurink Universe, an upgraded version of its Shurink facelift device, in Korea, selling 200 units. In the future, the company plans to expand its overseas markets to Brazil, Russia and Japan, focusing on its existing Shurink (Ultraformer 3) products.

Dental appliances: export growth remains robust despite market noise

January implant exports (HS code: 9021.29.0000) recorded US$40.17 million (+23.7% yy, -35.8% mm). Despite market noise, including the Korean Stock Exchange’s designation of Osstem Implant for delisting, steady export growth continued in January.

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