IBK Securities Initiates Coverage of Cears with Buy Rating and ₩30,000 Target Price

IBK Investment Securities has initiated coverage of Cears (ticker: 458870), a maker of wearable-based remote patient monitoring (RPM) devices, with a Buy recommendation and a target price of ₩30,000—implying 21% upside from the current share price of ₩24,800.

From ten-bagger to deep correction

Cears' shares have fallen 45% this year and are down sharply from a 52-week high of ₩63,034. The decline is a stark reversal for a stock that rose more than tenfold in 2025 alone. That rally was driven by the formal inclusion of wearable-based monitoring under South Korea's national health insurance reimbursement scheme, which triggered a surge in hospital deployments: the number of monitored beds supplied under Cears' "Sync" system leapt from 1,020 to 12,000. Revenue grew roughly sixfold, and the combination of expanding profits and multiple re-rating sent the valuation skyward.

This year, however, the mood has shifted. The pace of new bed deployments has slowed more than expected, and recognition of overseas revenue has been delayed, rapidly cooling investor enthusiasm.

A UAE contract that failed to reassure

In May, Cears signed a supply agreement worth approximately ₩20bn with PureHealth, the UAE's largest state-owned healthcare group. Even so, the share price continued to slide. Investors had moved on from the question of whether contracts could be won to whether domestic bed growth was sustainable and when, precisely, overseas sales would be booked. A structural quirk amplified the anxiety: export revenues cannot be recognised until local reimbursement rates are formally approved—a condition that has yet to be satisfied.

Valuation has come back to earth

IBK Securities argues that the sell-off has largely corrected the valuation excess. The firm derived its target price by applying a price-to-earnings multiple of 18 times to forecast earnings per share over the next twelve months. That multiple represents a 30% discount to the KOSDAQ Healthcare Index's forward P/E of 26 times, reflecting the early-stage nature of Cears' overseas revenue visibility. On the current share price, the implied 2026 forward P/E stands at 17.9 times—a far cry from the triple-digit multiples the stock commanded at its peak.

A large domestic market still largely untapped

South Korea has roughly 700,000 hospital beds in total, of which only around 40,000—about 6%—have adopted remote patient monitoring. Cears supplies 67% of those equipped beds, making it the overwhelmingly dominant player. Secondary-care hospitals (340,000 beds) and long-term care facilities (260,000 beds) offer substantial room for expansion, as do the 29 major tertiary hospitals that have yet to adopt the technology. From the third quarter of this year, Cears has been actively targeting long-term care facilities—where penetration is barely 1%—with simultaneous sales campaigns at 30 such sites.

Compelling unit economics

The business model is attractive. The upfront cost of equipping each bed runs to ₩3m–4m, while annual reimbursement revenue per bed reaches approximately ₩12m. Cears' distribution partner, Daewoong Pharmaceutical—one of South Korea's largest drug companies—pre-installs the equipment at hospitals and shares in the reimbursement income, which reduces the hospitals' initial outlay and shortens the payback period to around six months. Daewoong's nationwide hospital sales network provides Cears with a formidable channel to market.

Steep growth projected for 2026

IBK Securities forecasts Cears' 2026 revenue at ₩129.2bn, up 168% year on year. Operating profit is projected at ₩55.7bn, an operating margin of 43.1%, compared with ₩16.3bn in 2025. Gross margins rose to 72% in 2025 before easing to 67% in the first half of 2026, partly because of volume discounts on bulk shipments to Daewoong, though the operating margin held steady as selling and administrative costs fell in tandem. The inference is that Cears enjoys significant operating leverage as revenues scale.

The export story: MobiCare leads the way

The centrepiece of Cears' international ambitions is MobiCare, an outpatient monitoring device. Unlike Sync—which requires hospital-specific protocol configuration and system integration—MobiCare operates with just a patch device and analytical software, making it far simpler to deploy abroad. Its margins are also structurally higher than those of Sync, meaning a rising export mix would improve group profitability.

The PureHealth contract covers the supply of 105,000 MobiCare units over three years for outpatient diagnostics: 5,000 units in 2026, and 50,000 units in each of 2027 and 2028. Roughly 95% of the contracted volumes fall in the final two years. IBK Securities has taken a deliberately conservative stance on near-term export revenue, pencilling in ₩900m for 2026—well below the company's own guidance of ₩2.5bn—on the grounds that only confirmed volumes should be recognised. Export revenue is expected to surge to ₩9bn in 2027.

Risks that deserve attention

The optimistic forecasts come with meaningful caveats. Recognition of revenue under the PureHealth contract requires UAE authorities to formally set outpatient reimbursement tariffs; the company expects this to happen in the fourth quarter, but it remains an uncertain variable. Competition is also intensifying: rivals such as Meju are growing rapidly, and while Cears' market share edged up from 60% to 61% between 2025 and 2026, the gap with the second tier is narrowing. Product concentration is another concern: Sync accounts for 95% of total revenue, leaving the company highly exposed to any change in that segment's fortunes. Finally, given that 2025 revenue rose 495% from the prior year—an extraordinary base effect—there is a real possibility that growth will decelerate sharply enough to disappoint again, triggering another round of expectation downgrades.

What to watch for 2027

IBK Securities identifies three catalysts that will determine whether 2027 delivers positive surprises: a genuine acceleration of penetration into South Korean long-term care facilities; formal approval of outpatient reimbursement rates in the UAE; and the first meaningful recognition of US revenues. Should these materialise, the brokerage believes Cears could beat both its own forecasts and market consensus, potentially triggering another multiple re-rating. Cears' market capitalisation currently stands at ₩951bn on the KOSDAQ, South Korea's technology-focused secondary exchange.