[Click eStock] Hanmi Pharm Maintains Target Price Despite SG&A Expense Surge

[Asia Economy Reporter Junho Hwang] Korea Investment & Securities expects Hanmi Pharm to record somewhat disappointing operating profits in the second quarter of this year and maintained the target stock price at 380,000 KRW per share.

Korea Investment & Securities anticipated that Hanmi Pharm's operating profit in the second quarter would fall short of market expectations due to increased labor costs from annual salary negotiations and higher selling and administrative expenses following the lifting of COVID-19 social distancing measures.

They forecast sales to meet market consensus at 308.6 billion KRW, while operating profit is expected to decline by 54.5% from market expectations to 10.7 billion KRW.

Specifically, the performance of Beijing Hanmi Pharm and Hanmi Fine Chemical is expected to improve steadily. In particular, for Beijing Hanmi Pharm, the impact of COVID-19 is anticipated to have a positive effect, with continued growth in the cough suppressant products Itanjing and Ianping.

Oh Eerim, a researcher at Korea Investment & Securities, said, "Increased selling and administrative expenses and ongoing R&D investments will act as limiting factors for stock price growth," but added, "it is necessary to pay attention to upcoming new drug pipeline-related events in the second half of the year." He further noted, "In addition to Rolontis (PDUFA in September 2022), Poziotinib (PDUFA in November 2022), and Oraxol (expected MAA results in 2H22), clinical trial results for the Dual agonist (NASH treatment) are expected in the fourth quarter of this year."

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