On March 5, 2020, registered as a stock of interest

Written by BULGOM

The company was established in Israel in 2008 under the name 'Invasix.' It changed its name to 'InMode' in 2017 and went public on the Nasdaq in August 2019. The IPO was conducted at an offering price of $14 for 5 million shares. InMode designs, develops, manufactures, and sells medical aesthetic products, with a distribution network in 50 countries worldwide. Its main items include minimally invasive RF technology and non-invasive products, combining the functions of previously used Ulthera and Thermage products. It has emerged as a popular alternative for addressing sagging skin due to aging or weight gain without the need for major surgery. The effectiveness of its anti-aging treatments was highlighted by American actress and singer Paula Abdul, who underwent the procedure. (A picture is worth a thousand words; check it out.) The flagship product, BodyFX, uses suction to draw the skin and raises the temperature to 40°C before applying a high voltage of 2000v to break down fat.

Source: InMode YouTube

InMode offers a variety of products in areas such as hair removal, addressing pigmentation and vascular issues, improving skin pigmentation and vascular problems, anti-aging through skin remodeling, non-invasive body and facial fat removal, and minimally invasive procedures for scar-free facial remodeling. The basic cost is around 100 million won.

Source: InMode YouTube

In early March 2020, the global stock market was volatile due to COVID-19. InMode's stock price fluctuated dramatically, with its market capitalization swinging between 1.8 trillion won and 1.2 trillion won (based on 1,000 won to the dollar). (In such cases, I usually add it to my watchlist and wait for a lower price.)

Source: Yahoo Finance

The 52-week low was the listing price of $13.06, while the high was $58.76. Less than a year after its IPO, the stock price increased more than fourfold, but by the time I added it to my watchlist, it had dropped nearly 50% from its peak. At that time, the price-to-earnings ratio (PER) was 28.20, and during the conference call on February 18, 2020, the company announced an expected net profit of $76 million to $80 million for 2020. This would result in a forward PER of around 15 to 16. The operating profit margin is over 38%, and the debt ratio is a very stable 21%.

Revenue, operating profit, and net profit are all experiencing explosive growth. Revenue doubled in 2018 and grew by 1.5 times in 2019. Operating profit increased by 3.5 times in 2018 and 1.9 times in 2019. Net profit grew by 2.5 times in 2018 and 2.7 times in 2019. (Despite this rapid growth, it is wise to observe how COVID-19 will impact the 2020 results before investing.)

The company's growth potential relies on the success of new products. InMode's latest product, Morpheus8, is a subdermal remodeling device that improves the quality of collagen in the skin.

Accutite uses a minimally invasive technique with disposable needles to remove fat from under the eyes and around the nose and mouth.

Evoke is the first hands-free product that can be treated non-invasively. All three products are making a significant impact in the U.S. aesthetic market with industry-leading technology.

After the outbreak of COVID-19, there were many questions about its impact during the conference call on February 18, 2020. To summarize the company's responses: first, a decline in sales is inevitable, and many events will be canceled. Second, they will relocate production to avoid disruptions in the supply chain. Third, due to the closure of the China Food and Drug Administration (CFDA), they have not yet received product approvals. Conversely, if the CFDA resumes normal operations and approvals, it could lead to a significant increase in sales. The recognition of InMode's technological excellence, partly due to Paula Abdul, had previously driven up the stock price, but it has since declined significantly due to COVID-19.

After leaving Samsung C&T, I studied film production at the New York Film Academy. In 2010, I founded Bulgom Stock Research Institute (www.bulgom.co.kr), publicly demonstrating stock investment methods for ten years and achieving an average selling profit rate of 55% over the past 114 months across 83 sold stocks. I also conduct lectures related to U.S. stocks.

Books: <Bulgom's Unfailing Stock Investment Formula>, <Bulgom's Beginner's Guide to Stock Investment>, <Bulgom's Guide to Value Investing>