[Click eStock] Chongkundang, Undervalued Stock Price... Target Price Raised to 160,000 Won+

Kiwoom Securities raised the target price of Chong Kun Dang from 140,000 KRW to 160,000 KRW on the 29th, stating that the stock is undervalued. The investment rating was maintained as 'Buy.'

Huh Hye-min, a researcher at Kiwoom Securities, analyzed in a report on the same day, "We expect the undervaluation appeal to gradually increase depending on the disclosure of Novartis' indications in the second half of the year, the normalization of this year's profits leading to improved performance in 2025, and the utilization of abundant cash."

Chong Kun Dang's second-quarter sales were 385 billion KRW, and operating profit was 28.4 billion KRW. The sales figure (386.3 billion KRW) met market consensus, while operating profit (30.5 billion KRW) slightly missed expectations. However, these figures aligned with Kiwoom Securities' sales estimate (382.9 billion KRW) and operating profit estimate (28.4 billion KRW).

Researcher Huh explained, "There was an impact from the absence of K-CAB, which sold 30.1 billion KRW in the same period last year, and price reductions for Januvia. However, growth continued in key growth products such as Atozet, Prolia, and Dilatrend, offset by the introduction of products like Fexuclue and Godeks."

Additionally, operating profit was affected by the absence of K-CAB, the refund liability from the Gliatilin lawsuit reflected since the first quarter, and increases in labor and advertising expenses.

For the third quarter, sales are projected at 423.1 billion KRW and operating profit at 42.6 billion KRW. Researcher Huh stated, "Last year's third quarter recorded high operating profit due to reduced R&D expenses following changes in clinical development plans, and the fourth quarter achieved strong results due to contract payments from the Novartis technology transfer. This has led to a lack of performance momentum in the second half of this year, which seems to be holding back the stock price."

However, valuation appeal is expected to increase toward the end of the year. He said, "Next year, as Fexuclue and introduced products reflect their full impact and profits normalize, valuation appeal is expected to rise toward year-end. We have reflected the value of CKD-510, transferred to Novartis in the second half, at 149.6 billion KRW."

He added, "The company's cash assets are abundant at about 320 billion KRW, drawing attention to how this cash will be utilized in the future. As investments in biosimilars, biopharmaceuticals, and ADC research and development are gradually expanding, the funds could be used for related factory facility investments, CDMO, or M&A."

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