[Asia Economy Reporter Hyungsoo Park] As the government relaxes domestic mask export regulations, expectations for KM's performance improvement are growing.
Research Alme stated on the 22nd that as the domestic mask market enters a supply-dominant phase, the government is gradually easing mask export regulations, and KM's performance is expected to improve.
Choi Seonghwan, Senior Researcher at Research Alme, explained, "We expect overseas sales to increase due to the spread of the novel coronavirus infection (COVID-19)," adding, "Considering additional growth in the second half of this year, we present a target stock price of 31,000 won."
He continued, "Wearing masks to practice social distancing in daily life is now a necessity, not a choice," and added, "If mask-wearing becomes routine worldwide, KM will benefit."
The government expanded the purchase quantity of public masks from 3 to 10 per person and relaxed mask export regulations to 30% of production volume. Researcher Choi said, "A favorable environment for performance improvement is being created," and "sales of related products are expected to increase rapidly due to the second wave of COVID-19."
He emphasized, "Last month, we signed a mask supply contract worth 46.6 billion won with the Public Procurement Service, so we expect a 'surprise performance' in the second quarter."
Researcher Choi also explained, "Demand for droplet-blocking masks is surging in the summer, and it is estimated that 100,000 droplet-blocking masks can be produced monthly."
He added, "While Welcron's stock price surged after the U.S. Food and Drug Administration (FDA) approval announcement, KM's FDA approval exposure was relatively low, so there was no stock price reaction; thus, we expect market re-evaluation."
Research Alme estimated that KM will achieve sales of 295.4 billion won and operating profit of 48.9 billion won this year, representing increases of 131.6% and 581.1%, respectively, compared to last year.
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