[Click eStock] "Daewoong Pharmaceutical, Time to Focus on Solid Performance"

DB Financial Investment Report

DB Financial Investment maintained a buy rating and a target price of 160,000 KRW for Daewoong Pharmaceutical on the 4th.

The first-quarter results showed sales of 292.3 billion KRW and operating profit of 31 billion KRW, increasing by 7.4% and 15.7% respectively compared to the same period last year. The operating profit exceeded the market expectation of 28.7 billion KRW. This was driven by external growth as ETC and Nabota businesses increased by 4.7% and 40.3% respectively compared to the same period last year. Nabota exports reached 36.4 billion KRW, growing in the Evolus market and ROW regions, leading to a 1.1 percentage point improvement in the cost of sales ratio. Selling and administrative expenses, which had increased significantly in the last quarter, stabilized, resulting in an operating profit margin of 10.6%.

The second-quarter performance is expected to be similar to the same period last year. This is due to the anticipated sales decline from price reductions following the patent expiration of the diabetes treatment drug, Forxiga, in April. Myungseon Lee, a researcher at DB Financial Investment, stated, “Sales of Pexuprazan are increasing, Enblo has been launched, and the recognition of the contract payment from the technology transfer agreement for DWP213388 will maintain the level of the same period last year,” adding, “Growth in scale is expected more in the second half than in the second quarter.”

The civil second trial ruling related to Nabota is expected in the second half of next year. Currently, the company is confident in the continuity of the Nabota business following the decision to build the third Nabota plant. Additionally, the company has succeeded in signing technology export contracts for new drug candidates in the early development stage for two consecutive quarters.

Researcher Myunggeon Lee analyzed, “Considering this year’s performance improvement and new drug development achievements, now is the time for low-price buying,” and added, “It is time to focus on the steady external growth driven by the growth of Pexuprazan and Enblo, along with the slight improvement in the cost of sales ratio.”

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