[Click e-Stock] "Hugel: Overseas Toxin Growth and Cost Control Raise Earnings Expectations"

Target Price Raised

Daishin Securities stated on August 7 that "the growth of Hugel's overseas toxin business and cost control measures such as curbing selling and administrative expenses are expected to drive both sales and profitability," maintaining its "Buy" investment opinion and raising the target price to 5.1 million KRW.

This year, Hugel's sales are expected to reach 452.9 billion KRW and operating profit 227.4 billion KRW, representing year-on-year growth rates of 21% and 50%, respectively. The operating margin is projected to reach around 50%.

Han Songhyeop, a researcher at Daishin Securities, explained, "Shipments of toxin products to the United States are already confirmed and will increase sequentially each quarter, while Brazil is in the final stages of certification, with shipments likely to begin as early as the third quarter." He also noted, "Sales in North and South America are expected to grow from 30.9 billion KRW last year to 51.8 billion KRW this year." Regarding the Chinese market, he added that in-market sales in the first half expanded by more than 50% year-on-year, suggesting the annual guidance of 20-30% growth could be exceeded.

For the second quarter, Hugel posted sales of 110.3 billion KRW, up 16% year-on-year, and operating profit of 56.7 billion KRW, up 34%, in line with the market consensus of 57.5 billion KRW. The operating margin (OPM) reached 51%. Han commented, "Selling and administrative expenses were contained at around 30 billion KRW per quarter, maximizing the cost leverage effect."

This performance was particularly driven by the overseas toxin segment. Toxin sales reached 61.2 billion KRW, growing 20% year-on-year, while overseas toxin sales increased 37% compared to the same period last year, thanks to expanded exports to China and the impact of shipments to the United States that began in June, resulting in a high-value ASP (average selling price). In contrast, the filler segment declined 6% due to domestic base effects, but maintained solid demand in Europe and the Asia-Pacific (APAC) region.

The cosmetics business also showed growth. Cosmetics sales surged 105% to 13.6 billion KRW, driven by a domestic tourism boom and entry into overseas retailers such as Costco and Mannings in Hong Kong. The selling and administrative expense ratio remained at a solid 27%, and despite the burden of depreciation costs for the third factory, profitability improved significantly thanks to strong cost management.

Han concluded, "Hugel is positioned within the most attractive valuation range in the medical aesthetics sector."

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