[Click eStock] "T&L, August Export Hits Record High... Q3 Earnings Expectations UP"

[Asia Economy Reporter Park Jihwan] Shinhan Financial Investment stated on the 16th that T&L's record-high export performance last month has raised expectations for strong third-quarter earnings.

Researcher Lee Dong-geon of Shinhan Financial Investment said, "A record high was achieved in August exports," adding, "This is sufficient to raise expectations for strong third-quarter earnings." The export value of wound dressings announced the previous day was $3.327 million (approximately 3.96 billion KRW), a 758.2% increase compared to the previous year. It was reported as the highest monthly export ever, surpassing the previous record of $2.68 million in June by $640,000.

Considering the strong export trend up to August and the order backlog disclosed in the half-year report for September, third-quarter sales and operating profit are expected to reach 20.3 billion KRW and 8.9 billion KRW, respectively. Researcher Lee said, "Sales of orthopedic fixatives are expected to be 2 billion KRW, similar to the previous quarter," and "Sales of wound dressings are expected to increase by 20.1% compared to the second quarter, reaching 16.8 billion KRW." The core earnings driver, wound dressing exports, is forecasted to record 11.2 billion KRW, which is considered reasonable when taking into account actual sales, export customs clearance data, and overseas order backlogs.

Considering the effects of capacity expansion and favorable industry conditions, it is judged to be excessively undervalued. Since the second-quarter earnings season, concerns about earnings slowdown due to the spread of the Delta variant in the third quarter have led to a decline in stock prices of cosmetic medical companies. However, since T&L's main product, the Trouble Care Patch, is a B2C product, the impact is considered limited. Demand has continued to the extent that delivery is delayed by more than three months after orders, and it is expected that the effect of capacity expansion for wound dressing production in the fourth quarter will be added.

He emphasized, "After the expansion, entry into Europe and Asia, in addition to the current major customer Hero Cosmetics in the U.S., can accelerate, so there is no reason for undervaluation compared to peers in the same industry."

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