[Click e-Stock] "Green Cross Enters Structural Growth Phase with Increased Domestic Flu Vaccine Sales"

[Asia Economy, Reporter Oh Jooyeon] NH Investment & Securities has maintained its 'Buy' rating on Green Cross (GC Pharma), raising its target price from 180,000 won to 265,000 won. The company cited increased domestic flu vaccine sales and the expected launch of Hunterase (for Hunter syndrome) in China in the first half of next year as drivers for structural earnings growth.

According to NH Investment & Securities on October 14, Green Cross's consolidated sales for the third quarter of this year are projected at 429.8 billion won, with operating profit at 50.5 billion won. These figures represent increases of 16.3% and 38.2%, respectively, compared to the same period last year. Operating profit is expected to exceed consensus estimates by 9.6%.

For the domestic segment, the company estimates sales of 75.8 billion won for blood products (down 4.6% year-on-year), 117.1 billion won for vaccines (up 23.9%), 64.2 billion won for ethical drugs (ETC, down 8.9%), and 44.1 billion won for over-the-counter drugs (OTC, up 45.0%).

Flu vaccine sales are projected at 73.8 billion won, a 40% increase compared to the same period last year.

Researcher Koo Wanseong explained, "All business divisions except for ETC, where Advate (hemophilia) sales fell by 30% due to the impact of COVID-19 and Atacand (hypertension) sales declined following the return of AstraZeneca's distribution rights, are expected to grow."

For exports, sales are estimated at 31.3 billion won for blood products (up 13.4%) and 26.7 billion won for vaccines (up 163.9%). Additionally, approximately 30 billion won in other income from the disposal of the EuBiologics stake is expected to be reflected, resulting in a forecasted net profit of 61.2 billion won for the third quarter.

Koo stated, "We are raising our annual earnings per share (EPS) estimate for 2020 by 83.0% due to increased demand for the highly profitable domestic flu vaccine. Furthermore, with Hunterase receiving regulatory approval in China in September, this will be reflected in next year's results, significantly increasing the potential for structural earnings growth."

He added, "We maintain our top pick status for the pharmaceutical sector, as we expect multiple R&D catalysts, including GreenGene F (hemophilia) approval in China in the fourth quarter, Hunterase ICV approval in Japan, and an IVIG (immunological disease) approval application in the United States."

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