OK Biotech Co., Ltd. manufactures and sells blood glucose meters worldwide. It also provides nebulizers, glucometers, blood sugar meters, blood glucose test strips, and personal sound amplifiers. The company was founded in 2006 and is headquartered in Hsinchu City, Taiwan.

Taiwan

OK Biotech Co., Ltd.

Healthcare

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been good and slightly above its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends annually. 

4155.TW reported revenue of TWD 1 727mn in the last 12 months, up 4% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 12% from FY24 to TWD 0.57.

Over the last six months, the stock performance has varied, with an increase following a drop. When measured against its worldwide peers from the same industry (as shown above), the stock has been weaker, underperforming by 17ppts. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months its performance trailed that of this peer group by 13ppts and its growth decelerated by 2ppts in the previous month. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 11.5% in the last 12 months, up from 7.3% in FY23. 

Historically, 4155.TW has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 4.8%, a growth from 0.2% in FY23. 

OK Biotech Co., Ltd. reported a return on equity (RoE) of 3.4% in the last 12 months, up from 0.1% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 2.4% in the last 12 months, an increase from 0.1% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 3.0%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.7 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

4155.TW has very poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is relatively stable and remains mildly favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note adequate interest coverage and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to weak positions in its industry, negligible return on capital.

In highly turbulent market conditions, 4155.TW is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, 4155.TW is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. 

From both historical and forecast perspectives, the stock is fairly priced compared to similar stocks. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITD. 

OK Biotech Co., Ltd.

NT$ 17.7

4

OK Biotech Co., Ltd.

NT$ 17.7

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

NT$ 17.7

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