[Click eStock] "Hugel, China-bound Sales Occur... Earnings Expectations Rise"

Korea Investment & Securities Issues 'Buy' Rating and 260,000 KRW Target Price... Closing Price on 6th at 190,300 KRW

[Asia Economy Reporter Kum Boryeong] An analysis has emerged that expectations for performance are increasing as Hugel's sales to China have begun.

According to Korea Investment & Securities on the 7th, Hugel's performance in the fourth quarter of last year is estimated at 62.9 billion KRW in sales and 24.3 billion KRW in operating profit. Compared to the previous year, sales increased by 17% and operating profit by 39%.

Jin Hongguk, a researcher at Korea Investment & Securities, explained, "Initial sales of botulinum toxin to China amounting to about 5 billion KRW led to the increase in sales," adding, "Due to the spillover effect from the sales ban on competitors, domestic toxin and filler sales increased by 35% and 15% respectively compared to the previous year, and exports also recovered, driving strong performance."

Due to the base effect from the stabilization of the novel coronavirus infection (COVID-19) and the full-scale occurrence of sales to China, sales this year are expected to increase compared to the previous year. Korea Investment & Securities forecasts Hugel's sales this year to rise by 27% from the previous year to 262.2 billion KRW. Hugel's market share in China this year is expected to be 5% in volume terms and 15.2 billion KRW in sales.

Researcher Jin said, "Assuming the supply price to the partner company Sahwan Pharmaceutical is 50% of the selling price, and considering the partner's proactive orders for 2022 volumes, the sales to China accounted for in Hugel's sales this year are estimated at 15.6 billion KRW. After the initial order in the fourth quarter of last year, additional orders can be expected in the first quarter of this year," adding, "The official toxin market launch in China is scheduled for the second quarter. Therefore, Hugel's sales to China in the second half of this year will be determined by sales trends in the market after the second quarter. Operating profit is expected to increase by 43% from the previous year to 106.8 billion KRW due to sales volume expansion and cost stabilization."

Korea Investment & Securities gave Hugel a 'Buy' investment opinion with a target price of 260,000 KRW. The target price was raised from the previous 230,000 KRW. The closing price on the 6th was 190,300 KRW.

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