L&C Bio Eyes 1 Trillion Won in Sales by 2029 Driven by 'Sold-Out Sensation' Rituo... Will It Hit a New All-Time High?

Stock Price Surges 65% This Month
Annual Revenue Expected to More Than Double Through 2029
Anticipation Builds for 1 Trillion Won Production Approval at China Plant

The stock price of L&C Bio, a company specializing in regenerative medicine, has been rising rapidly since the beginning of this month. The popularity of the skin booster 'Rituo', launched in November last year, is having a positive impact on the stock price. Both foreign and individual investors are showing net buying, driving the upward trend. Investors who have witnessed the sharp rise in the stock price of PharmaResearch, the leading domestic skin booster company, appear to be maintaining an optimistic outlook for L&C Bio. Expectations for growth are increasing, with some projections suggesting that sales will surpass 1 trillion won in 2029.

According to the financial investment industry on September 9, L&C Bio's stock price has risen by 65% so far this month. Its market capitalization has recovered to 1.26 trillion won. Foreign investors and individuals have recorded cumulative net purchases of 12.8 billion won and 6.1 billion won, respectively.

L&C Bio holds the top market share in the domestic skin graft market. It is one of only two companies in Korea certified by the American Association of Tissue Banks (AATB). The company's main revenue comes from the human tissue graft and human tissue-based medical device business. Human tissue grafts, including 11 types of tissues such as bone, cartilage, fascia, skin, amniotic membrane, ligament, tendon, heart valve, blood vessel, nerve, and pericardium, are produced and distributed with approval from government agencies such as the Ministry of Food and Drug Safety.

Its main products include Megaderm (skin graft), Megaderm Plus (skin graft medical device), and Megacarti (degenerative arthritis treatment medical device).

On a consolidated basis for the first half of this year, the company posted sales of 38.3 billion won and an operating loss of 400 million won. Compared to the same period last year, sales increased by 11.3%, but the company turned to an operating loss. Losses from the Chinese subsidiary continued, resulting in a deficit. On a separate basis, sales reached 31 billion won with an operating profit of 2.2 billion won. Kim Hyungyeom, a researcher at KB Securities, explained, "Profitability declined due to increased expenses from domestic and overseas business expansion," and added, "Attention should be paid to the increase in sales."

He continued, "Full-scale expansion is now underway, and following the NMPA approval of Megaderm Plus in January of this year, the company will officially enter the Chinese market starting in the third quarter." He also emphasized, "We should pay attention to the sales expansion of the next-generation skin booster 'Elravie Rituo' through Huons Medics' sales network, as well as the strengthening of the lineup for breast reconstruction and wound dressing products."

L&C Bio stated that with Rituo now being supplied to over 1,000 clients, the company is accelerating its transformation into a specialized skin regeneration company. It expects to surpass 2,000 clients by the end of this year. The mechanism of directly supplementing the extracellular matrix (ECM) is recognized as a differentiated skin regeneration approach compared to existing skin boosters, leading to increased trust and demand for the product. Due to a recent surge in demand, Rituo experienced a temporary stockout. The company has shifted to a two-shift production system to meet demand. L&C Bio is transforming from a medical device company focused on surgical human tissue grafts such as Megaderm and Megacarti, to one led by the ECM-based skin booster Rituo.

Reflecting the popularity of Rituo, perspectives in the Yeouido securities industry are also changing. Eugene Investment & Securities believes that the price-earnings ratio (PER) should be set at a 10% premium to the average multiple in 2019, when PharmaResearch's medical device sales growth began in earnest. Chaeun Lee, a researcher at Eugene Investment & Securities, stated, "The target stock price was calculated by applying a target PER of 25 times the consolidated net profit for 2027," and explained, "The target multiple was set at a 10% premium to the average multiple in 2019, when PharmaResearch's medical device division began its sales growth."

She added, "In 2019, the skin booster market was just beginning to emerge, but things are different now." She emphasized, "Not only is domestic demand increasing rapidly, but inbound demand from tourists is also growing quickly. We are now at the starting point of a second market expansion into overseas markets." She further stated, "A 10% premium was given to reflect the market's growth potential."

Eugene Investment & Securities has projected L&C Bio's sales to be 117.2 billion won in 2026, 324.7 billion won in 2027, 670.5 billion won in 2028, and 1.1156 trillion won in 2029. The operating margin is expected to remain at the 30% level from 2027 onward.

Growth Research, an independent research firm specializing in small caps, also introduced L&C Bio as a challenger capable of matching PharmaResearch's valuation. Yonghee Han, a researcher at Growth Research, explained, "Huons Medics, the distributor of Rituo, is promoting Rituo as a 'post-Rejuran' product that can replace PharmaResearch's Rejuran."

The growing potential in China has also been cited as a reason for the rising stock price. Researcher Yonghee Han stated, "The production capacity (CAPA) of the L&C China plant has been completed at a scale of about 1 trillion won," and added, "The timing for production approval from the Chinese government is expected to be the end of next year."

He continued, "In January of this year, the skin graft medical device Megaderm Plus received approval from the Chinese NMPA, and full-scale sales in China are expected to begin in the second half of this year." He added, "Chinese sales could benefit from equivalence tests between products manufactured in Korea and those produced at the Chinese plant, helping to accelerate the production approval schedule. This will be important for future growth momentum."

L&C Bio reached an all-time high of 155,600 won on October 6, 2020, when expectations for entry into the Chinese market were high. Eugene Investment & Securities has set a target price of 68,000 won for L&C Bio. There is growing attention on whether the company can set a new record high, depending on Rituo's sales trends and the progress of its entry into the Chinese market.