[Click eStock] HK Innoen, Expecting Performance Improvement in the Second Half

On the 28th, Korea Investment & Securities forecasted that HK Innoen would see strong performance and a rise in stock price in the second half of the year. However, no investment opinion or target price was provided.

Oh Eui-rim, a researcher at Korea Investment & Securities, stated, "The company's main product, K-CAB, a treatment for gastroesophageal reflux disease, is currently being co-marketed with Chong Kun Dang, with the contract scheduled to end at the end of this year, drawing significant market attention." He added, "It is understood that negotiations are currently underway, and the future direction of the contract is expected to act as a trigger moving the stock price." Regardless of the domestic market situation, global sales are progressing smoothly. At the end of last year, the product was launched in the Philippines, received product approval in Indonesia and Singapore, and obtained product approval in Mexico earlier this year. In China, insurance registration has been completed, with royalty inflows expected in the third quarter. Accordingly, an improvement in performance is anticipated in the second half of the year.

However, profitability improvement is expected to be difficult until the second quarter. HK Innoen’s business is divided into the Ethical Therapeutics (ETC) division and the HB&B (Health Functional Foods and Cosmetics) division. The ETC division’s main products are intravenous fluids and K-CAB (for gastroesophageal reflux disease), while the HB&B division is represented by the Condition product line. The HB&B division, which includes cosmetics (beauty) products, recorded an operating loss of 200 million KRW (continuing deficit) in the first quarter. Researcher Oh predicted, "Due to seasonal factors, advertising expenses for the beauty business are concentrated in the first half of the year, so profitability improvement is expected to be difficult until the second quarter."

The main product of the HB&B division is the hangover relief Condition product line. Condition products have seen a rapid increase in sales as the COVID-19 endemic phase begins. Annual sales in 2022 reached 60.4 billion KRW, a 54.6% increase compared to the previous year, and the first quarter recorded the highest-ever first-quarter sales of 15 billion KRW (+42.6%). Although the market share of Condition drinks appears to have slightly declined, this is attributed to the launch of non-drink Condition products (sticks and pills). Researcher Oh stated, "Condition sticks and Condition pills are products designed for convenience in consumption and storage, showing rapid market share growth, and steady market share increases are expected to continue through the end of the year."

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