The author is an analyst of NH Investment & Securities. He can be reached at firstname.lastname@example.org. — Ed.
Dental implant exports set a new monthly record in June, led by strong exports to China and Iran. We view concerns over a q-q slowing in exports in early July as being overblown, advising investors not to overreact to short-term noise. With aesthetic and toxin export rebounds being detected, we advise taking a selective approach in choosing sector stocks.
Dentistry: New monthly/quarterly records set for implant exports
In June, dental implant exports reached US$71.49mn (+23.9% y-y, +12.5% m-m), setting a new all-time monthly record. Exports to China (US$30.45mn, +26.9% y-y, +31.2% m-m) and Iran (US$5.54mn, +55.6% y-y, +151.5% m-m) both showed significant growth.
Recently, concerns have been raised about a q-q drop in implant exports due to a slowdown in preliminary dental implant export data for Jul 1~10 (6 business days). But, we consider these worries as being excessive, noting that dental implant exports amounted to US$190mn (+38.9% y-y, +30.7% q-q) in 2Q22, a new quarterly record. In our view, the 10-day export data for July is too early of an indicator for gauging full-July exports. Though 3Q tends to be a relatively slow season (vs 2Q), 3Q22 exports should be on a similar level with those for 2Q22. Of note, strong export growth at Korea’s three major dental implant players individually centered upon China, Russia, and Iran, respectively.
Turning to dental imaging equipment, exports in June amounted to US$24.66mn (+0.3% y-y, +6.7% m-m), confirming a continued steady growth trend. Exports to the US, a key importer, decreased m-m to US$5.7mn (+55.2% y-y, -31.1% m-m), but exports to other countries remained robust.
Aesthetics: See brisk m-m rebound
Aesthetic device exports for in June totaled US$77.32mn (+17.7% y-y, +25.0% m-m), well above the previous month’s disappointing figure. It should be noted that all export markets displayed strong growth.
Goyang City, the largest export region for aesthetics devices, posted an export value of US$14.73mn (+36.4% y-y, +68.3% m-m) in June, driving q-q export growth. In May, aesthetic device exports declined on logistics woes amid supply chain disruptions, but this issue looks to now be resolved based upon the June export level.
Toxin: Exports to China correspond to historical trend (only 1~2 shipments per quarter)
Toxin exports in June reached US$27.5mn (+5.4% y-y, +26.2% m-m), a new monthly high mark. With exports to the US (US$5.52mn, -0.8% y-y, -0.8% m-m), the major export region, remaining flat m-m, the increase is mainly attributable to a recovery in exports to China (US$5.79mn -24.3% y-y, +859.1% m-m). Of note, Korea’s toxin exports to China stood at zero over February to May and resumed only in June. This is because in general, Hugel’s toxin shipments to China tend to occur only once or twice per quarter.