[Click eStock] "SK Biopharm Expected to Grow as the Second UCB"

[Asia Economy Reporter Jang Hyowon] Eugene Investment & Securities analyzed on the 2nd that SK Biopharm will grow into the second UCB. The investment opinion was 'Buy', with a target price of 110,000 KRW.

Researcher Han Byunghwa of Eugene Investment & Securities stated in the report, "The target price estimation for SK Biopharm reflects the high-growth phase value of the competitor, Belgium's UCB," and added, "UCB began to be highly valued as a pure pharmaceutical and bio company since 2005, with a PSR (Price to Sales Ratio) of about 5 times at that time."

Researcher Han expected that SK Biopharm's sales based on its current two marketed drugs and one pipeline will grow to at least 1.8 trillion KRW by 2030. Applying a PSR of 5 times, the appropriate market capitalization is 9 trillion KRW, which translates to 110,000 KRW per share.

He explained, "Valuing SK Biopharm using the traditional pipeline valuation method inevitably leads to undervaluation," and added, "Since SK Biopharm is a company based on the massive industrial capital of the SK Group, there is no doubt about its growth." UCB also expanded its bio business by acquiring other companies with abundant financial resources. He expects SK Biopharm to grow through a similar path.

Furthermore, he estimated, "SK Biopharm's sales will be 46 billion KRW in 2020, 629.4 billion KRW in 2024, and 1.8 trillion KRW in 2030," and added, "The performance estimates include direct sales of Xcopri in the US, royalty sales in Europe, royalty sales of Sunosi in the US and Europe, and direct sales of Cenobamate in the US and Europe, while excluding early-stage clinical phase 1 drugs from the performance estimates."

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