[Click eStock] HK Innoen, Steady Growth Every Year... Current Stock Price Attractive

[Asia Economy Reporter Lee Seon-ae] Hana Securities stated on the 24th that HK Innoen is expected to undergo a stock re-rating due to the full-scale commencement of China K-CAB royalties from next year, the progress of the US K-CAB Phase 3 clinical trial, and the profitability improvement of K-CAB. Accordingly, they initiated coverage with a 'Buy' rating and a target price of 45,000 KRW.

Researcher Park Jae-kyung of Hana Securities forecasted, "HK Innoen's consolidated sales for the third quarter of this year are expected to reach 200.4 billion KRW, a 6.2% increase year-on-year, and operating profit is expected to increase by 12.3% to 19.2 billion KRW, in line with consensus."

Following the normalization of sales, which had surged ahead of the Gardasil price increase in the second quarter, MSD vaccine sales in the third quarter recorded 30.5 billion KRW, down 23.6% year-on-year, showing a decline compared to the previous quarter. However, this is expected to be offset by receiving the K-CAB US Phase 3 milestone. Operating profit margin is projected to improve to 9.6% from 7.0% in the previous quarter.

Researcher Park assessed, "HK Innoen is expected to show steady growth this year as well as in 2023 and 2024, based on stable domestic sales growth of K-CAB, the full-scale global expansion of K-CAB, and profitability improvements in the infusion and HB&B business divisions."

Domestic and overseas sales of K-CAB are also expected to continue growing next year. K-CAB sales are projected to be 102.2 billion KRW this year and 134.1 billion KRW next year. Although it has already established itself as a blockbuster, additional growth potential remains due to the continued growth capacity of potassium-competitive acid blockers (P-CAB) in the domestic market and the clear advantages of K-CAB compared to other gastrointestinal ulcer drugs.

The full-scale global market entry of K-CAB was also cited as a positive factor. K-CAB was launched in China under the product name Taixinzan in May this year. It is analyzed that sales will begin in earnest through the insurance reimbursement market after pricing is set in the first half of next year. The completion of Phase 1 clinical trials in April this year and the first patient dosing in Phase 3 clinical trials in October indicate smooth progress toward entering the US market.

Researcher Park emphasized, "Based on this year's expected earnings per share (EPS), HK Innoen's current price-to-earnings ratio (PER) is about 18.4 times, which is lower than the 21.9 times of major large pharmaceutical companies."

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