[Click e-Stock] "Hugel: This May Be the Lowest Valuation Period"

On April 14, Daishin Securities maintained its target price for Hugel at 400,000 won and a "Buy" investment rating, reflecting expectations for a significant ramp-up in direct sales revenue in the second half of the year.

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Hansong Hyup, a researcher at Daishin Securities, stated in a report released the same day, "With a solid financial structure, including a debt ratio of 10% and net cash of 500 billion won, Hugel is now driving full-scale external growth," adding, "Given the possibility of a re-rating as direct sales revenue ramps up in the second half, this may be the lowest valuation period."

Hugel's sales for the first quarter of this year are projected to increase by 25% year-on-year to 112 billion won, with operating profit expected to rise by 0.7% to 39.2 billion won. While sales are expected to slightly exceed consensus estimates, the operating margin is anticipated to fall short. This is because U.S. direct sales labor costs (25-30 billion won per year) and global medical marketing expenses are reflected from the first quarter, while sales remain in the off-season.

The researcher noted, "A two-year compound annual growth rate (CAGR) of 31% is expected for sales, and the 12-month forward price-earnings ratio (PER) of 17 times is considered low," adding, "Attention should be paid to 2027-2028, when the fruits of external growth through investment, rather than short-term cost burdens, will be fully realized."

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