The share prices of InBody, a manufacturer of body composition analyzers, are on the rise on the Kosdaq market, with its third-quarter earnings hitting a record high.
The Seoul-based company posted 24.44 billion won ($21.86 million) in sales in the third quarter, jumping 35.9 percent from 17.98 billion won a year earlier. Operating profit also surged 51.5 percent year-on-year to 4.61 billion won.
More than half of InBody’s revenue comes from overseas markets, including the U.S., Japan, and China. Last year, the company opened branches in India, Malaysia, and the Netherlands.
The company's stocks have picked up since Nov. 3. Its stock price rose 31 percent from 29,400 won on Nov. 3 to 38,500 won as of 11:40 a.m. Tuesday. Compared to the price of 26,450 won on Jan. 2, the stock price was up 45.5 percent as of Tuesday.
Analysts said the company’s third-quarter earnings beat the market’s estimate.
“InBody’s third-quarter earnings were much higher than the market had expected. Based on ‘Inbody’ for professional bodybuilders, the company will see robust growth, which will appeal to investors,” said Kim Choong-hyun, an analyst at Mirae Asset Daewoo Securities. “Body composition analysis is a new concept in overseas markets, which makes it more effective for the company to directly run branches rather than using agents,” he added.
Kim expected that InBody’s revenue would mainly come from fitness centers and hospitals in the U.S., Japan, and China where it has branches. In countries with new chapters, the company will be able to see as much growth as it did in the existing ones, he said.
The Financial Services Commission’s recent announcement on new guidelines for health-promoting insurance products will also benefit InBody’s revenue growth, analysts said.
As insurance firms are expected to develop instruments to give incentives to subscribers who can prove their health-enhancing efforts, the value of the upcoming product “InBody Watch” will rise, they said. The new product is to come to the market within this year.
“The company may have found it difficult to penetrate into the business-to-consumer(B2C) market in the past because products and their functions for professionals often overlapped with those for ordinary consumers and the user value was unclear,” Kim said.
As the upcoming InBody Watch has a new function of cardiovascular control, it will be helpful in managing chronic diseases, however. If combined with an insurance product, the watch can reach the B2C market as well, Kim added.
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