[Post-IPO] ③ Humasis, Performance 'Promise' Unkept for 3 Years... This Year 'Relief' Thanks to COVID-19

Delay in Product Development Disrupts Performance Improvement Plans
Record High Performance Expected This Year Due to COVID-19 Diagnostic Kit Exports

Amid the aftermath of the novel coronavirus infection (COVID-19), funds are flowing into the frozen initial public offering (IPO) market. This year’s largest IPO, SK Biopharm, attracted subscription deposits amounting to 31 trillion won, marking the largest scale ever. KakaoBank, an internet-only bank, is also preparing for its IPO aiming for the second half of this year. As the domestic stock market has shown significant volatility due to COVID-19, the number of individual investors newly starting stock investments has increased. With growing interest in IPO investments, it is necessary to make a proper judgment regarding the appropriate offering price when investing in public offerings. Asia Economy reviews the investment prospectuses presented by newly listed companies on the domestic stock market and examines the appropriateness of the offering prices.

[Asia Economy Reporter Yoo Hyun-seok] Humasis, which entered the KOSDAQ market through a SPAC merger in 2017, was initially evaluated to have the potential for 20-30% annual growth at the time of listing. However, its performance slipped from the first year of listing, failing to meet the targets set for the market until last year. Nevertheless, thanks to COVID-19 diagnostic kits this year, record-high performance is expected, raising hopes to make up for past sluggishness.

Humasis is a multi-quantitative in vitro diagnostics specialized company established in 2000. It develops, produces, and sells in vitro diagnostic medical devices such as immunoquantitative analysis equipment and test reagents. The company focuses on point-of-care testing (POCT) immunoassay reagents and POCT immunoquantitative analyzers.

Humasis, which entered KOSDAQ through a technology special listing, showed disappointing results from its first year of listing in 2017. In 2017, Humasis recorded sales of 8.6 billion won and operating profit of 300 million won. These figures were 28.09% and 78.83% lower, respectively, than the external evaluator’s forecast of 11.8 billion won in sales and 600 million won in operating profit. Notably, the external evaluation agency failed to accurately predict the annual performance despite the half-year results already being available.

The gap between forecast and actual performance remained large in 2018 and 2019 following 2017. The 2018 sales forecast was 14.9 billion won and operating profit 1 billion won, but actual sales were 9.7 billion won. Operating profit turned into a loss, with a 1 billion won deficit. Last year’s expected sales and operating profit were 18.1 billion won and 2.1 billion won, respectively, but actual figures showed 9.2 billion won in sales and 900 million won operating loss. Particularly, poor performance worsened the financial situation. The debt ratio, which was 77.2% in 2017, rose to 112.5% as of the first quarter, and accumulated deficit increased from 6.9 billion won to 8.9 billion won. A company official said, “We planned to develop quantitative analyzers and sell them globally, but delays in development disrupted the plan. Last year, sales from OEM pharmaceutical companies and infectious disease products in the domestic sector decreased.”

Despite recording sluggish results with sales of 2.1 billion won and operating profit of 100 million won up to the first quarter, Humasis is expected to achieve its highest performance this year. The reason is the COVID-19 diagnostic kits. Humasis has completed product registration of COVID-19 diagnostic kits with the U.S. Food and Drug Administration (FDA) and signed a supply contract worth 3 billion won with the Indian Embassy in April, raising expectations for related sales. Currently, the company produces 2 million diagnostic kits per month, but with expansion, it is expected to reach 3 million kits per month starting in August. The company is exporting COVID-19 diagnostic kits to overseas markets including South America, Europe, and Southeast Asia.

Among domestic securities firms, Meritz Securities and Shinhan Investment Corp. have released performance forecasts for Humasis this year. Meritz Securities expects Humasis to record sales of 88.6 billion won and operating profit of 27.4 billion won this year, while Shinhan Investment forecasts sales of 66.8 billion won and operating profit of 36.7 billion won. Although the sales difference between the two securities firms reaches 20 billion won, both expect significant growth compared to the previous external evaluation agency’s forecast of 23.1 billion won in sales. Particularly, following news of joint development of a COVID-19 antigen diagnostic kit with Celltrion, the stock price hit the upper limit for five consecutive trading days from the 16th to the 22nd, rising 752.52% compared to the end of last year.

A company official explained, “Humasis exports more than 50 products to over 80 countries worldwide. We plan to explore new markets through COVID-19 and focus on infectious disease products such as dengue and malaria.”

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