[Click eStock] "SD Biosensor, Pandemic Prolongation... Focus on Securing Mid- to Long-Term Growth Drivers"

[Asia Economy Reporter Ji-hwan Park] Korea Investment & Securities evaluated on the 29th that SD Biosensor has gained an opportunity to secure long-term growth drivers due to the unrelenting COVID-19 pandemic.

SD Biosensor, which was listed in July this year, is an in vitro diagnostics specialized company equipped with diagnostic platforms such as immunochemical diagnostics, molecular diagnostics, and blood glucose measurement. It has demonstrated rapid response capabilities by being the first in the world to launch MERS and Ebola antigen diagnostic products. During the COVID-19 pandemic, it was the first in the world to obtain WHO emergency use authorization for its COVID-19 antigen diagnostic product. Centered on the rapid diagnostic kit (Standard Q), it posted cumulative sales of KRW 2.4862 trillion and operating profit of KRW 1.2162 trillion in the third quarter of this year, marking increases of 69.6% and 70.4% respectively compared to the same period last year.

Currently, SD Biosensor is pursuing mid- to long-term growth through the on-site molecular diagnostic device M10 and additional M&A. The molecular diagnostic device M10 was launched in the third quarter and can conduct various tests including COVID-19, HIV, HBV, and HCV, so demand is expected to continue even after the pandemic. Continuous sales growth is also possible through consumable cartridges. Songhoon Jeong, a researcher at Korea Investment & Securities, said, "SD Biosensor acquired UXN, a continuous glucose monitoring device manufacturer, in September, and Eco Diagnostica, a Brazilian in vitro diagnostics company, in November," adding, "Through this, strengthening of the blood glucose measurement business, expansion of diagnostic kits into South America, and business expansion into animal diagnostics are expected."

SD Biosensor has secured approximately KRW 1.2 trillion in M&A funds as of the end of the third quarter through strong sales of COVID-19 kits and inflow of public offering funds. It holds KRW 706.5 billion in cash and cash equivalents and KRW 473.2 billion in short-term financial products. The company has a strong will for additional M&A to advance overseas in manufacturing and distribution. Aggressive M&A is expected to secure long-term growth drivers in the future.

After listing, SD Biosensor’s stock price declined due to concerns over profitability deterioration and lack of long-term growth drivers caused by increased vaccination rates, development of oral therapeutics, and the With-Corona policy. However, if M10 and additional M&A succeed, these concerns can be alleviated. Researcher Songhoon Jeong said, "Since the With-Corona policy started in Korea in November, confirmed cases have been increasing again," adding, "With the recent emergence of the Nu (B.1.1.529) variant, the pandemic may last longer than expected."

He added, "As the pandemic period extends, SD Biosensor is expected to benefit because it can secure time and funds for the aforementioned mid- to long-term growth drivers."

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