Investment Analyst

Chris Choi

Equity Bottom-Up

"The best thing that happens to us is when a great company gets into temporary trouble . . . We want to buy them when they’re on the operating table.” — Warren BuffettInBody Co Ltd (041830, KOSDAQ) is a leading manufacturer of a Body Composition Analyzer products facing a temporary problem. I have been looking at this company since September 2016 and this is the updates from my previous research. The result of Q3 2016 was disappointing. One of the biggest reason for this was the sales decrease in Korea. The Korean government reduced its budget for public health centers and clinics. For this reason, the demand was very weak for the last several months. The sales are down by 2.2% compared to the same quarter last year and the company’s stock is currently trading at KRW 24,600, which is down 58% year-to-date.This is a great entry point to buy a piece of great business at a deep discount. The technology that InBody provides is regarded as the best among the doctors and scholars in the global market and the company has an opportunity to capture the bigger market in the U.S. and China alone over time. The share is oversold/mispriced primarily due to the uncertainty around near-term business results and market participant’s tendency to reflect current result continuously into the future.What’s nice about this investment is that the revenue comes from overseas is increasing rapidly. During FY2015, more than 74% of revenue came from exports and more than 50% of revenue comes from the US, China, and Japan. The BCA markets in the US and China are still in the beginning stage and have a lot of room to grow for the upcoming years. I am confident that InBody will recover, and its domestic sales issue would seem like an unfortunate and the current negatives would be offset by the strong export sales growth.In January, the company was trading at KRW 58,000 and now is trading at KRW 24,600. I think the stock should be worth at KRW 51,000 based on the estimated EPS of FY2016 and the 5-year average P/E ratio of the company, thus generating a 109% return from its current price in less than three years or 28% annualized.

"The best thing that happens to us is when a great company gets into temporary trouble . . . We want to buy them when they’re on the operating table.” — Warren BuffettInBody Co Ltd (041830, KOSDAQ) is a leading manufacturer of a Body Composition Analyzer products facing a temporary problem. I have been looking at this company since September 2016 and this is the updates from my previous research. The result of Q3 2016 was disappointing. One of the biggest reason for this was the sales decrease in Korea. The Korean government reduced its budget for public health centers and clinics. For this reason, the demand was very weak for the last several months. The sales are down by 2.2% compared to the same quarter last year and the company’s stock is currently trading at KRW 24,600, which is down 58% year-to-date.This is a great entry point to buy a piece of great business at a deep discount. The technology that InBody provides is regarded as the best among the doctors and scholars in the global market and the company has an opportunity to capture the bigger market in the U.S. and China alone over time. The share is oversold/mispriced primarily due to the uncertainty around near-term business results and market participant’s tendency to reflect current result continuously into the future.What’s nice about this investment is that the revenue comes from overseas is increasing rapidly. During FY2015, more than 74% of revenue came from exports and more than 50% of revenue comes from the US, China, and Japan. The BCA markets in the US and China are still in the beginning stage and have a lot of room to grow for the upcoming years. I am confident that InBody will recover, and its domestic sales issue would seem like an unfortunate and the current negatives would be offset by the strong export sales growth.In January, the company was trading at KRW 58,000 and now is trading at KRW 24,600. I think the stock should be worth at KRW 51,000 based on the estimated EPS of FY2016 and the 5-year average P/E ratio of the company, thus generating a 109% return from its current price in less than three years or 28% annualized.

InBody Co(041830, KOSDAQ); Current Undervaluation Offers a Compelling Investment Opportunity.

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Thematic (Sector/Industry)

SillaJen Biotherapeutics (established in 2006) is indeed a rare breed in Korean pharmaceutical world. It is not a generic drug maker. It is not a biosimilar maker either. It makes new biomedical products. A majority of Korea's pharmaceutical makers are still generic drug makers. The likes of Celltrion and Samsung Bioepis have emerged as a biosimilar maker. But they are still a few. Biomedical makers are even rarer. Hanmi Pharmaceutical is one of these rare breeds. Now, another biomedical maker…

SillaJen Biotherapeutics (established in 2006) is indeed a rare breed in Korean pharmaceutical world. It is not a generic drug maker. It is not a biosimilar maker either. It makes new biomedical products. A majority of Korea's pharmaceutical makers are still generic drug makers. The likes of Celltrion and Samsung Bioepis have emerged as a biosimilar maker. But they are still a few. Biomedical makers are even rarer. Hanmi Pharmaceutical is one of these rare breeds. Now, another biomedical maker…

SillaJen's December IPO: Valuation, Growth Expectation and IPO Timing

South Korea

InBody Co., Ltd. manufactures and markets a body composition analyzer and other related medical instruments.  The Company supplies its products to the hospitals, clinics, fitness clubs, and households.  Biospace also exports its products to overseas markets, such as America, Europe, and Asia.

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Inbody Co Ltd (041830 KS)

InBody Co(041830, KOSDAQ); Current Undervaluation Offers a Compelling Investment Opportunity.

"The best thing that happens to us is when a great company gets into temporary trouble . . . We want to buy them when they’re on the operating...

Chris Choi

SillaJen's December IPO: Valuation, Growth Expectation and IPO Timing

SillaJen Biotherapeutics (established in 2006) is indeed a rare breed in Korean pharmaceutical world. It is not a generic drug maker. It is not a...

Sanghyun Park

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