[Click eStock] "Pharmaresearch, Bright Earnings Outlook but Stock Undervalued"

[Asia Economy Reporter Kwon Jae-hee] SangSangIn Securities maintained a 'Buy' rating on PharmaResearch on the 18th and set a target price of 110,000 KRW.

PharmaResearch's consolidated sales for the third quarter of this year were 46.2 billion KRW, and operating profit was 16.5 billion KRW, increasing by 19.4% and 20.9% respectively compared to the same period last year. The company is experiencing high growth centered on medical devices (Conjuran, Rejuran) and cosmetics, and the cost ratio has decreased due to factory efficiency improvements and product mix enhancements, resulting in an operating profit margin of 35%.

The outlook is also positive. Domestic growth of medical devices and cosmetics continues, along with an increase in exports. Sales from the medical device business in the third quarter reached 22.9 billion KRW (18.7%), showing high growth. Rejuran exports are generating around 4 billion KRW per quarter to Singapore, Malaysia, Ukraine, China, and other countries, and the growth trend is expected to continue with the expansion of export regions. Additionally, sales in the pharmaceutical sector are stably generated, and with the domestic approval of Botulinum Toxin Lientox Injection (100 units) expected in the first half of 2023, new domestic sales are anticipated, which could create operational synergies between toxin and filler products. Cosmetics also showed high growth with third-quarter sales of 10.6 billion KRW (49.3%). Exports are being promoted, and high growth is expected to continue into 2023.

In particular, strong performance is expected in the fourth quarter, which is a seasonal peak period. Consolidated sales for the fourth quarter of this year are projected to be 50.9 billion KRW, and operating profit 17.7 billion KRW, representing increases of 21% and 40.1% respectively compared to the same period last year.

Researcher Ha Tae-gi of SangSangIn Securities analyzed, "PharmaResearch's estimated 2023 price-to-earnings ratio (PER) is only 10 times, indicating significant undervaluation," and recommended "buy and hold from a long-term perspective."

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