[Click eStock] "Ildong Pharmaceutical, Earnings Improvement Expected Despite Continued Losses"

[Asia Economy Reporter Lee Jung-yoon] Korea Investment & Securities maintained a buy rating and a target price of 500,000 KRW on Ildong Pharmaceutical on the 11th, stating that although losses continue, improvements in the performance of imported drugs and the CHC (Consumer Healthcare) division are expected.

Ildong Pharmaceutical's sales for the second quarter of this year were expected to be 156.2 billion KRW, a 9.2% increase compared to the consensus estimate. Operating loss was projected at 5.8 billion KRW, a narrower loss compared to the 9.4 billion KRW loss in the previous quarter. This reflects an improvement in core business performance despite ongoing research and development (R&D) investments. The ETC (Ethical Therapeutic Category) division's performance is expected to increase by 8.2% year-on-year. Key products Nexium and Rabiet could see increased sales alongside the expansion of the gastroesophageal reflux disease market. Demand for COVID-19 diagnostic kits is expected to remain at a similar level to the previous quarter. Additionally, as recovery to normal life progresses, the CHC division's performance is also estimated to increase by 7.3% year-on-year.

Oh Eui-rim, a researcher at Korea Investment & Securities, explained, "R&D investment of approximately 27 billion KRW is expected in the second quarter, with an annual R&D investment amount forecasted at 106 billion KRW. We believe similar levels of investment will continue for the next several years."

He added, "The organization is transitioning into a new drug developer and is recruiting various personnel related to this, so investment amounts are unlikely to decrease in the short term. Developing a single new drug can cost over 1 trillion KRW, and R&D investment is essential as long as the goal is new drug development."

Researcher Oh also noted, "Recently, concerns about a resurgence of COVID-19 have increased stock price volatility. Since the approval status of COVID-19 treatments and their potential launch timing remain unclear, an approach based on fundamentals rather than short-term momentum is necessary."

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