DEEP RESEARCH · INBODY
[InBody] 3Q24 Quarterly Report Questions and Estimate Update
Reviewing 3Q cost increases, new-business losses, SG&A expansion, and questions for IR
0. Bottom line first
This quarterly report changed so that all details are easier to see. Overall labor costs and SG&A increased, and losses at subsidiaries BWA and KORT also widened. Still, I see this as likely tied to new-product sales expenses and headcount growth; the broader product set InBody can sell could become a source of future operating leverage.
After reviewing the quarterly report, I organized the items I want to confirm and refined part of the note after Friday. The content below is my estimate from reading the report further, along with questions already sent to IR. I will share the reply when it arrives.
1. Product price changes and automatic blood pressure monitors
Official fact: The report shows an increase in automatic blood pressure monitor prices. Average unit prices and production changes by product group can be checked, but detailed pricing policy is not explicitly explained.
Interpretation: The price change may be related to whether KORT products are included. I plan to confirm this directly with IR.
2. Cheonan Plant 2 asset increase
Official fact: Land at Cheonan Plant 2 increased by about KRW 178.5 million, and building assets increased by about KRW 23 million.
Interpretation: This appears mainly to be investment for production-facility expansion. I need to confirm whether it involves use of part of the factory site or new equipment construction.
3. Source of KRW 1.1 billion in dividends
Official fact: The report recorded KRW 1.1 billion in dividends.
Interpretation: The specific source of the dividend needs to be confirmed, including whether it came from a particular overseas subsidiary.
4. Losses at KORT and BWA
KORT
Based on the 3Q24 report, KORT appears to have generated a loss because operating expenses were high relative to revenue. It is likely early-stage investment cost for a new business.
California subsidiary
The main cause of the loss appears to be higher initial marketing and operating costs. Its revenue model and market-share gains need to be followed up.
I plan to ask IR for more detail.
5. Increase in loss allowance
Official fact: About KRW 362 million of loss allowance was recognized through profit or loss.
Interpretation: The increase appears mainly related to adjustments for receivables collection risk. It may include overseas-site foreign-currency translation and write-offs of uncollectible receivables, which needs confirmation.
6. SG&A details
| Item | Change | What to confirm |
|---|---|---|
| Salaries | Increased from KRW 14.0 billion to KRW 17.0 billion | Likely due to hiring and salary increases. |
| Advertising | Increased from KRW 1.7 billion to KRW 2.9 billion | Expected to relate to U.S. and European market expansion, though China is also possible and needs confirmation. |
| Total SG&A | Increased from KRW 32.0 billion to KRW 40.0 billion | Need to confirm whether this was planned or one-off. |
7. Possibility of revenue growth
I plan to ask whether the company can be confident in revenue growth and what the concrete strategy is. If the cost increase is upfront investment, the key point is whether it translates into revenue growth and operating leverage later.
Sources
- Naver Blog original: https://m.blog.naver.com/PostView.naver?blogId=star_of_self&logNo=223660643751