Battery Mania Damage Slowly Raising Bio Stocks

Strong Performance in Pharma and Bio in Q2
Government Support Acts as a Positive Factor... Full Investment Sentiment Improvement Yet to Come

Pharmaceutical and bio stocks, which had struggled to gain attention due to the momentum of secondary battery stocks, are now rebounding. This is attributed to favorable second-quarter earnings and government support. However, it is suggested that positive data releases and technology exports by individual companies are necessary for a full-fledged rebound.

According to the Korea Exchange on the 2nd, the KOSPI Pharmaceuticals Index rose 3.72% from the previous trading day on the 1st to 13,318.85. This is over 1,000 points higher than 12,070.33 on the 10th of last month. The KOSDAQ Pharmaceutical Index also increased from 7,249.46 to 7,913.64.

Individual stocks have also shown notable gains recently. During the same period on the KOSPI, Samsung Biologics rose from 708,000 KRW to 802,000 KRW, and Celltrion increased from 148,300 KRW to 151,000 KRW. Particularly, Yuhan Corporation jumped from 56,600 KRW to 74,900 KRW. On the KOSDAQ, Celltrion Healthcare rose from 61,500 KRW to 66,600 KRW, and HLB increased from 30,100 KRW to 33,550 KRW.

This year, pharmaceutical and bio-related stocks on both KOSPI and KOSDAQ struggled to gain momentum. This was mainly because investment flowed predominantly into secondary battery stocks, diverting attention away. However, bio stocks are rebounding amid strong earnings and expectations of positive clinical news this year.

Indeed, companies such as Samsung Biologics, Yuhan Corporation, Dong-A ST, Chong Kun Dang, and Daewoong Pharmaceutical, which announced their second-quarter earnings, exceeded market expectations. Notably, Yuhan Corporation recorded consolidated sales of 495.7 billion KRW and operating profit of 27.1 billion KRW, marking an earnings surprise with increases of 2.6% and 59.9% respectively compared to the same period last year.

Additionally, the government has added positive momentum by deciding to support bio companies. Last month, through the 'Bio Economy 2.0 Roundtable,' the government announced plans to foster the bio industry with goals to achieve a bioeconomy production scale of 100 trillion KRW and export scale of 50 billion USD by 2030. To this end, it plans to support 15 trillion KRW in private investment in the biopharmaceutical sector by 2030.

However, since investment sentiment toward bio stocks has not fully improved, there are opinions that positive issues need to emerge for individual companies. Huh Hye-min, a researcher at Kiwoom Securities, stated, "It appears that investors are waiting for positive developments in the pharmaceutical and bio sectors, which have long been neglected amid cyclical rotation of funds. The release of excellent data, activation of technology transactions, and earnings improvements are necessary for a full improvement in investment sentiment."

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