Lunit continues to solidify its global footprint with significant strides in financial growth and international partnerships, an analyst’s report said.

According to the report by Jun Choi at Macquarie, the results for the second quarter announced last Friday revealed a promising increase in revenue from Lunit's INSIGHT, the company's artificial intelligence-based cancer detection software.

Even though the sale in the second quarter stood at 5.4 billion won ($4 million), a 50 percent drop from the previous quarter, Choi stressed that the company displayed a sale surge of 118 percent compared to the same period in 2022.

"This shows that the company has been shifting from one-time payments to recurring revenues for Lunit INSIGHT and SCOPE," Choi said. "Furthermore, Lunit's operational loss for the quarter dropped to 10 billion won, aligning with market expectations thanks mainly to their effective R&D and labor cost management."

Choi noted that Lunit's expansion is not restricted to financial gains.

"In June, the company achieved a significant milestone by becoming eligible for insurance coverage in Japan after Fujifilm decided to use X-ray analysis software powered by Lunit INSIGHT," the report said. "The advance will drive the swift adoption of AI solutions in the Japanese market."

He added that Fujifilm's dominant market share and the newfound insurance reimbursement advantage lay the groundwork for a smoother integration process.

Choi also pointed out that Lunit is grappling with regulatory agencies in several countries to broaden its product reimbursement landscape.

"The partnership announcement with Lunit and Seha Virtual Hospital (SVH) in Saudi Arabia, known as the world's largest virtual hospital, in July, will help further boost Lunit's performance," he said. "This collaboration will also help bolster Lunit's AI database and overall global reputation."

The international medical community has also recognized Lunit's contributions in the academic realm.

"The company participated in the American Society of Clinical Oncology (ASCO) 2023 congress in June, presenting 16 studies that further affirm the credibility of its SCOPE technology," Choi noted. "The growth in Lunit's patent portfolio also shows the company's relentless pursuit of innovation."

Choi stressed that Lunit has registered 10 new patents this year, accumulating 85.

Future growth catalysts included adopting Lunit's AI tools in national cancer screening initiatives globally, forging new partnerships with leading medtech firms, and securing regulatory approvals for Lunit's other products.

Choi said his brokerage maintains a discounted cash flow (DCF)-based target price of 215,000 won for Lunit.

"As we forecast a rapid uptake of its AI diagnostic services within the medical sector, we predict that Lunit's AI-biomarker platform will soon become essential in cancer drug research and development," Choi added.

As of 1 p.m., Wednesday, Lunit's shares stood at 148,300 won, down 8.57 percent from the previous trading day.