[Click eStock] "Daewoong Pharmaceutical, Profit Improvement Trend Continues in the Second Half"

[Asia Economy Reporter Song Hwajeong] SK Securities maintained its 'Buy' rating and target price of 200,000 KRW for Daewoong Pharmaceutical on the 21st, forecasting that the profit improvement trend will continue in the second half of the year.

SK Securities expects Daewoong Pharmaceutical's Q2 earnings to record sales of 261 billion KRW, a 15.5% increase compared to the same period last year, and an operating profit of 20.1 billion KRW, turning positive and exceeding market expectations (consensus). Researcher Lee Dalmi of SK Securities said, "The contract payment for 'Pexuprazan' recognized in Q1 is expected to be recognized at around 5 billion KRW again this June," adding, "'Nabota' will drive performance improvement not only through exports to the U.S. but also additional exports to Canada."

It is expected that the profit improvement trend will continue in the second half due to cost reduction following the conclusion of lawsuits. The researcher explained, "As the U.S. International Trade Commission (ITC) lawsuit is concluded, related costs will significantly decrease," adding, "In 2019 and 2020, when the lawsuit was ongoing, annual litigation costs were about 20.9 billion KRW and 35 billion KRW, respectively. Although the lawsuit has ended, settlement costs remain, so this year's litigation costs are expected to decrease significantly to around 10 billion KRW."

There is an opinion that expectations for Pexuprazan will have a positive impact on the stock price. Pexuprazan, a treatment for gastric ulcers, is expected to receive domestic approval in the second half of this year and is scheduled for launch in the first half of next year. The researcher said, "Approval in China is expected in 2024, and approval in the U.S. in 2025," adding, "It is positive as it is expected to replace the sales (60 billion KRW annually) of 'Albis,' which was withdrawn after the 'Ranitidine' incident."

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