[Click eStock] "Seegene, Benefiting from the Relentless Spread of COVID-19"

Published 25 Aug.2020 07:56(KST)

[Asia Economy Reporter Park Jihwan] Hana Financial Investment analyzed on the 25th that the global spread of the novel coronavirus infection (COVID-19) is not ending anytime soon, and the demand for diagnostic kits is expected to continue in the second half of the year. Accordingly, they maintained a 'Buy' investment rating and raised the target stock price by 40% from the previous 200,000 KRW to 280,000 KRW.

Sun Minjung, a researcher at Hana Financial Investment, explained, "Seegene's 2nd quarter sales and operating profit were 274.8 billion KRW and 169 billion KRW, respectively, representing increases of 838% and 3540% compared to the previous year," adding, "This performance significantly exceeded market expectations."

Despite a one-time expense of approximately 11.6 billion KRW due to performance bonuses in the 2nd quarter, they evaluated that an operating profit margin of 61.5% was achieved, confirming the leverage effect from the increase in sales volume.

Recently, concerns about repeated spread of the COVID-19 virus have been rising, especially in South Korea and some European countries. In particular, some European countries where tourism is important have loosened their vigilance, resulting in nearly 3,000 new daily cases in Spain and close to 1,000 confirmed cases in Italy. Seegene's regional share of COVID-19 diagnostic kits is 27% in Europe, with the company holding the number one market share for diagnostic kits in Italy and Spain.

Researcher Sun Minjung stated, "In the second half of the year, it is expected that the COVID-19 virus will resurge simultaneously with the influenza virus," and explained, "Seegene has started selling products bundled as sets combining existing respiratory products and COVID-19 diagnostic kits."