[Click eStock] Gyeongnam Pharmaceutical Turns Profitable in Q1 Thanks to BTS Effect... "Export Expectations in the Second Half"

Hana Financial Investment Kyungnam Pharmaceutical Report
"Lemona to Achieve 45 Billion KRW Sales by BTS Contract Period"

[Asia Economy Reporter Minji Lee] Hana Financial Investment forecasted on the 19th that Kyungnam Pharmaceutical's sales of the Lemona product are showing a remarkable increase due to the appointment of BTS as the advertising model. Additionally, they anticipated positive effects from the recruitment of development and sales personnel from Kwangdong Pharmaceutical.

Group BTS / Photo by Big Hit Entertainment

The company reported sales of 17.5 billion KRW and operating profit of 1.1 billion KRW in the first quarter, marking a 74% growth and a return to profitability, respectively. This is the first return to profit since the second quarter of 2018, achieved through intensive business restructuring.

Researcher Jeong-gi Lee of Hana Financial Investment explained, “The product development staff from Kwangdong Pharmaceutical are consecutively launching new products,” and added, “The sales team from Kwangdong Pharmaceutical is leading the expansion of pharmacy coverage.”

The flagship product, Lemona San, recorded sales of 7.3 billion KRW, a 121% increase, attributed to the effect of appointing BTS as the advertising model and the recruitment of Kwangdong Pharmaceutical personnel. Additionally, beverage sales, which reflect the sales impact of Kwangdong Pharmaceutical staff, reached 700 million KRW, significantly exceeding the quarterly average sales of 100 million KRW.

In 2014, when the company appointed actor Kim Soo-hyun as a model, it sold approximately 20 billion KRW worth of products annually. Researcher Lee Jeong-gi projected, “Considering that sales exceeded 7 billion KRW in the first quarter alone after appointing BTS as the model, Lemona’s sales are expected to surpass 45 billion KRW during the contract period (until the end of 2020).”

The second quarter is expected to maintain the profitability trend following the first quarter, supported by Family Month and the effects of COVID-19. Sales for the second quarter are anticipated to reach 18 billion KRW, with operating profit of 1.5 billion KRW, representing 55% growth and a return to profitability.

In the second half of the year, momentum from orders to China is expected to become prominent. Kyungnam Pharmaceutical received CFDA approval in 2017 for high-dose vitamins destined for the Chinese market, allowing direct sales not only through China’s online market but also offline stores such as pharmacies, marts, and H&B stores. Researcher Lee Jeong-gi stated, “Starting from the third quarter, distribution channels will gradually expand beginning with China’s Tmall.”

This content was produced with the assistance of AI translation services.