[Click eStock] Huons, Performance Growth Centered on Health Functional Foods Rather Than Prescription Drugs

[Asia Economy Reporter Lee Seon-ae] Shin Young Securities maintained a 'Buy' investment opinion and a target price of 77,000 KRW for Huons.

According to Shin Young Securities on the 16th, despite the stagnation in the prescription drug business during the COVID-19 pandemic in 2020, Huons was able to achieve continuous performance growth through the performance growth and profitability turnaround of its beauty and well-being business health functional food subsidiaries (Huons Natural, Huons Nature). The consolidated sales in 2020 increased by 11.4% year-on-year to 406.7 billion KRW, and operating profit increased by 11.7% to 54.1 billion KRW. While prescription drugs remained at the previous year's level of 184.3 billion KRW, the beauty and well-being business, centered on health functional foods, increased by 23.3%, and consignment manufacturing increased by 16.3%.

This performance growth is expected to continue.

In November last year, Huons issued 50 billion KRW worth of convertible bonds (CB) and is currently promoting the construction of a dedicated eye drop factory in Plant 2, following the expansion of the eye drop production line in 2019. The introduction of a state-of-the-art production line and the transfer of the complex production line from Plant 1 to Plant 2 aim to operate the factory more efficiently (with a capacity of 480 million units). The factory is scheduled to be completed in January 2022, receive KGMP certification, and start operation in 2023.

Researcher Lee Myung-sun of Shin Young Securities explained, "Huons is advancing further as an ophthalmology-specialized company by establishing Plant 2 and focusing on the development of eye drop pipelines such as nano-composite eye drops (HUC2-007) and Thymosin β4 (HUB1-023)," adding, "We maintain the target price due to continuous performance growth and smooth pipeline development."

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