[Click eStock] "Medytox, Abundant Mid-to-Long-Term Growth Momentum... Target Price Up"

[Asia Economy Reporter Kwon Jaehee] Shinhan Investment Corp. maintained its 'Buy' rating on Medytox on the 10th and raised the target price from the previous 175,000 KRW to 200,000 KRW.

Medytox's consolidated sales for the third quarter of this year reached 53.3 billion KRW, and operating profit was 14.5 billion KRW. Although these figures represent decreases of 23.7% and 52.7% respectively compared to the same period last year, the operating profit exceeded estimates by 42.4%, marking an earnings surprise.

Researcher Donggeon Lee of Shinhan Investment explained, "The year-on-year decline in performance is due to the recognition of a lump sum of 35 billion KRW from contract deposits and milestones related to the return of rights and contract termination of MT10109L in September 2021, which is a one-time issue. When excluding this revenue, actual sales are estimated to have increased by more than 50%."

Strong growth in both toxin and filler products reflected the operating leverage effect, and some selling and administrative expenses, including bad debt provisions, also decreased, resulting in strong performance.

By segment, toxin sales recorded 26.9 billion KRW, a 56.4% increase year-on-year. Exports remained similar to the previous quarter at 13.8 billion KRW, while domestic sales increased by about 30% quarter-on-quarter to 13.1 billion KRW, driven by balanced growth across all products led by Coretox. Filler sales reached 18.5 billion KRW, up 63.7% year-on-year. Domestic sales slightly decreased quarter-on-quarter to 3.5 billion KRW due to intensified competition in the domestic filler market, but exports achieved 15 billion KRW (78.6%) based on CE certification of new filler products and balanced growth in global markets including Europe.

Growth is expected to continue into the fourth quarter, and annual sales for this year are projected to recover to pre-COVID-19 levels seen in 2019. Consolidated sales and operating profit for the fourth quarter are estimated at 56.2 billion KRW and 15.1 billion KRW, respectively. Similar to the third quarter, the fourth quarter is expected to sustain high growth year-on-year based on balanced growth in toxin and filler products.

Researcher Lee said, "The operating value is 725.6 billion KRW, which is the current market capitalization level," adding, "Next year, while sales growth of existing products continues, there is abundant mid- to long-term growth momentum with the approval and launch of the next-generation botulinum toxin 'NewLux' expected in the first quarter."

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