[Special Stock] Green Cross Falls on Target Price Downgrade Due to Earnings Adjustment
[Asia Economy Reporter Hwang Yoon-joo] Green Cross is on a downward trend due to the downward revision of its 2022 and 2023 performance forecasts.
As of 9:21 AM on the 2nd, Green Cross is trading at 125,000 KRW, down 1.96% (2,500 KRW) from the previous day.
On this day, SK Securities stated, "Based on the Q3 earnings announcement, we have lowered Green Cross's operating profit forecasts for 2022 and 2023 by 25.0% and 26.2%, respectively," and lowered the target stock price to 170,000 KRW. This is because the earnings forecast revision also led to adjustments in earnings per share (EPS) by 32.0% and 34.2%, respectively.
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Green Cross recorded operating profit and sales of 44.8 billion KRW (-31.8%) and 459.7 billion KRW (-1.3%) in Q3, respectively. The operating profit was 10.0% below market consensus. The main reason for the decline in performance was the base effect related to the recognition of COVID-19 vaccine distribution sales in Q3 of last year. Additionally, the start of Phase 2 clinical trials for the shingles vaccine in the U.S. led to a 16% increase in research and development expenses.
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