[Click eStock] "Picogram, Stock Price at Bottom Considering This Year's Profit Growth"

[Asia Economy Reporter Ji Yeon-jin] Shinhan Financial Investment stated on the 14th that PicoGram's expected price-to-earnings ratio (PER) of 10 times this year is considered the bottom range, taking into account the increase in high-margin filter sales and profit growth expected from the cumulative sales of water purifiers.

PicoGram, established in 2002, is a company specializing in the development and production of water purifiers and filter components. In 2005, it developed a one-touch self-replacement water purifier filter system and began supplying filters to major domestic and international clients. Since then, it has grown significantly through OEM/ODM production of water purifiers and filters for large corporations. In 2017, it entered the B2C market by launching its own brand of water purifiers, and recently achieved vertical integration by establishing production facilities for filter raw materials. As of the first half of last year, sales were composed of 45% water purifiers and 55% filters.

Jeong Min-gu, a researcher at Shinhan Financial Investment, said, "Due to the decrease in face-to-face service demand caused by COVID-19 and the burden of rental costs, self-managed lump-sum water purifiers are gaining attention," adding, "PicoGram's lump-sum water purifier brand, Purial, has seen related sales grow rapidly at an average annual rate of 23% from its product launch in 2017 through 2021." Purial maintains the number one position in the 'water purifier' category on platforms such as Naver Shopping and Coupang. As of the end of the first half of last year, cumulative sales reached 360,000 units.

This increase in water purifier sales is expected to lead to a rise in filter demand in the future. Also, starting from the first half of this year, cost reduction of filter products is possible through the internalization of filter raw materials (which account for 40% of filter costs), so continuous profitability improvement is anticipated going forward.

This year, sales are expected to increase by 16.8% year-on-year to 32.8 billion KRW, and operating profit is forecasted to rise by 46.9% to 5.8 billion KRW.

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