[Click e-Stock] "Boryung Grows Despite Price Cuts... Target Price Raised"

Target Price Raised from 13,000 Won to 14,000 Won

On May 20, SK Securities raised its target price for Boryung from 13,000 won to 14,000 won while maintaining its "Buy" investment rating.

Lee Seonkyung, a researcher at SK Securities, stated, "Despite the accounting impact of the Kanarb price reduction lawsuit, profitability has improved. We expect continued growth in high-margin LBA products, and with hopes for a resolution of the Kanarb risk, we are raising our target price."

Boryung's sales in the first quarter of this year reached 255.4 billion won, up 6.2% from the same period last year, while operating profit surged 84.7% year-on-year to 20.2 billion won. The company delivered strong results despite the accounting impact related to the Kanarb price reduction lawsuit.

The main factors behind this solid performance include, first, stabilized sales in the hypertension and dyslipidemia division, driven by robust growth of "Dukarb" and the "L Family." In addition, "Alimta," which has completed its transition to in-house production, and "Gemzar," whose liquid formulation sales are increasing, saw significant growth. Sales of key products such as Mucomyst and Gelfos also grew. The growth of high-margin products and improved efficiency in selling, general, and administrative expenses contributed to a better gross profit margin (GPM).

The researcher forecast that Boryung's consolidated sales this year will reach 1.0577 trillion won, with an operating profit of 80.2 billion won. She explained, "With the completion of the in-house transition for LBA products and the expansion of sales in liquid formulations, the accounting impact of the Kanarb price reduction lawsuit is expected to be minimized. In particular, in the second quarter, a new product from the Kanarb family is scheduled to be launched for the first time in four years since the release of Dukarb Plus in June 2022, so the risk of declining Kanarb sales is expected to gradually diminish."

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