Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Dentsply International / Equity Bottom-Up

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<li>
<a href="https://www.smartkarma.com/entities/dentsply-international-inc" target="_blank" data-smartkarma-citation="entities:10926:1" rel="noopener">Dentsply International (XRAY US)</a> guided for 2024 revenue of $3.96–4.02B, flat to up 1.5% on an organic basis and 12% growth in 2024 EPS at midpoint.</li>
<li>The macro environment continues to be challenging. The company anticipates the ongoing softness in imaging will continue in 2024. Cost savings will support the bottom-line growth.</li>
<li>In terms of every valuation metrics, Dentsply is overpriced compared to its U.S.-listed peers. Strong balance sheet, accelerating dividend, and buyback do not justify the pricey valuation.</li>
</ul>



Dentsply International (XRAY US) guided for 2024 revenue of $3.96–4.02B, flat to up 1.5% on an organic basis and 12% growth in 2024 EPS at midpoint.
The macro environment continues to be challenging. The company anticipates the ongoing softness in imaging will continue in 2024. Cost savings will support the bottom-line growth.
In terms of every valuation metrics, Dentsply is overpriced compared to its U.S.-listed peers. Strong balance sheet, accelerating dividend, and buyback do not justify the pricey valuation.


Dentsply International (XRAY US): Sombre Growth Outlook and Pricey Valuation

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<a href="https://www.smartkarma.com/entities/dentium-co-ltd" target="_blank" data-smartkarma-citation="entities:23565:1" rel="noopener">Dentium (145720 KS)</a> earns more than 50% of its total revenue from China. The company’s revenue from China reported a CAGR of 32% during 2018–2022.</li>
<li>Despite concern over China slowdown and lower ASP due to VBP, in 3Q23, Dentium reported 12% YoY revenue growth in China, similar growth rate reported in 2Q23, driven by volume.</li>
<li>Economic slowdown is lingering over the global as well as Chinese dental implant sector, especially the premium brands. Dentium is positioned at the upper price portion within the value segment.  </li>
</ul>



Dentium (145720 KS) earns more than 50% of its total revenue from China. The company’s revenue from China reported a CAGR of 32% during 2018–2022.
Despite concern over China slowdown and lower ASP due to VBP, in 3Q23, Dentium reported 12% YoY revenue growth in China, similar growth rate reported in 2Q23, driven by volume.
Economic slowdown is lingering over the global as well as Chinese dental implant sector, especially the premium brands. Dentium is positioned at the upper price portion within the value segment.  


Dentium (145720 KS): Economic Health of China Is the Key to Bring Back Smiles

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<a href="https://www.smartkarma.com/entities/modern-dental-group-ltd" target="_blank" data-smartkarma-citation="entities:21020:1" rel="noopener">Modern Dental Group (3600 HK)</a> reported strong 1H23 performance, with 12% YoY revenue growth to HK$1.6B, driven by increase in demand for its products from existing, returning, and new customers.</li>
<li>With increasing economies of scale resulting from China re-opening and global dental industry recovery and increase in the proportion of digital solution cases, net profit jumped 109% YoY to HK$210M.</li>
<li>Despite macroeconomic headwinds, the company is confident that the medium and long-term global demand for dental prosthetics is expected to continue due to key irreversible demographic factors and trends.</li>
</ul>



Modern Dental Group (3600 HK) reported strong 1H23 performance, with 12% YoY revenue growth to HK$1.6B, driven by increase in demand for its products from existing, returning, and new customers.
With increasing economies of scale resulting from China re-opening and global dental industry recovery and increase in the proportion of digital solution cases, net profit jumped 109% YoY to HK$210M.
Despite macroeconomic headwinds, the company is confident that the medium and long-term global demand for dental prosthetics is expected to continue due to key irreversible demographic factors and trends.


Modern Dental Group (3600 HK): Stellar 1H23 Result- Volume Drives Revenue Growth; Net Profit Doubled

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<a href="https://www.smartkarma.com/entities/straumann-holding-ag" target="_blank" data-smartkarma-citation="entities:22493:1" rel="noopener">Straumann Holding AG (STMN SW)</a> is the global leader in dental implantology, with ~29% market share. With multi-brand implant portfolio, the company is well-positioned to capture the market opportunity.  </li>
<li>Straumann raised expectations for 2022 organic revenue growth to the mid-teen percentage range from low double-digit percentage range earlier, versus the strong comparative year (+42% organic revenue growth in 2021).</li>
<li>Straumann has significantly expanded its addressable market to CHF18B+. To achieve the company’s ambition of CHF5B revenue by 2030, an average organic growth rate of ~10% annually is needed.</li>
</ul>



Straumann Holding AG (STMN SW) is the global leader in dental implantology, with ~29% market share. With multi-brand implant portfolio, the company is well-positioned to capture the market opportunity.  
Straumann raised expectations for 2022 organic revenue growth to the mid-teen percentage range from low double-digit percentage range earlier, versus the strong comparative year (+42% organic revenue growth in 2021).
Straumann has significantly expanded its addressable market to CHF18B+. To achieve the company’s ambition of CHF5B revenue by 2030, an average organic growth rate of ~10% annually is needed.


Straumann Holding AG (STMN SW): Strong Organic Revenue Growth Indicates Continued Business Recovery

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<li>Just over a year ago, leading Korean dental implant and dentistry supply company <a href="https://www.smartkarma.com/entities/osstem-implant-co-ltd" target="_blank" data-smartkarma-citation="entities:1450:1" rel="noopener">Osstem Implant (048260 KS)</a> announced the largest-ever embezzlement case in Korea. The stock was suspended.</li>
<li>There were fears about forced selling by the founder, and PE funds circled. Activist KCGI probably bought in Q3 but built a 5+% stake by end-December 2022.</li>
<li>Korean PE Firms MBK and Unison Capital have now launched an MBO-style Tender Offer to buy 2.4-11.2mm shares in the company at a sharp premium to the pre-activism undisturbed price.</li>
</ul>


Just over a year ago, leading Korean dental implant and dentistry supply company Osstem Implant (048260 KS) announced the largest-ever embezzlement case in Korea. The stock was suspended.
There were fears about forced selling by the founder, and PE funds circled. Activist KCGI probably bought in Q3 but built a 5+% stake by end-December 2022.
Korean PE Firms MBK and Unison Capital have now launched an MBO-style Tender Offer to buy 2.4-11.2mm shares in the company at a sharp premium to the pre-activism undisturbed price.


MBK/Unison Capital Korea Do a Deal for Osstem Implant (048260 KS) Thwarting Activist KCGI

United States

DENTSPLY International Inc. manufactures and distributes dental supplies on a worldwide basis.  The Company's products include dental prosthetics, endodontic instruments, dental sealants, ultrasonic scalers, dental x-ray equipment, and intraoral cameras.  DENTSPLY also provides impression materials, orthodontic appliances, and dental operatory software systems, and other dental products.

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Dentsply International (XRAY US)