[Click eStock] "Green Cross, a True Beneficiary of COVID-19... Target Price Up 20%"

[Asia Economy Reporter Park Jihwan] Hana Financial Investment maintained a 'Buy' rating on Green Cross Corporation on the 10th, stating that it is emerging as a true beneficiary of the novel coronavirus infection (COVID-19), and raised the target price by 20% from the previous 200,000 KRW to 240,000 KRW.

Sun Minjung, a researcher at Hana Financial Investment, explained, "Green Cross's consolidated second-quarter sales are estimated to be 366.6 billion KRW, an increase of about 2% year-on-year, while operating profit is estimated to be 16.1 billion KRW, a decrease of about 18%."

Generally, Green Cross's second-quarter performance has always been favorable due to exports of influenza vaccines to the Southern Hemisphere, but this year, 13.3 billion KRW worth of Southern Hemisphere influenza vaccines were shipped early in the first quarter, so the second-quarter influenza vaccine export volume is expected to be only about 27 billion KRW, a decrease of approximately 34% compared to the previous year.

Researcher Sun Minjung said, "When the influenza virus season arrives domestically in the third quarter, Green Cross has always achieved its highest performance in the third quarter due to influenza vaccine sales," and added, "In the third quarter of this year, record-breaking performance on an unprecedented scale is expected."

Green Cross's domestic influenza vaccine sales in the third quarter are estimated to increase by about 35% year-on-year to over 70 billion KRW. Due to the expansion of sales of influenza vaccines with good profit margins, operating profit in the third quarter is also expected to increase by nearly 40% compared to the previous year.

The imminent start of clinical trials for the COVID-19 plasma treatment is also a positive factor. Researcher Sun said, "With the cooperation of recovered patients, Green Cross is expected to begin production of the plasma treatment and start clinical trials in July," adding, "The plasma treatment uses plasma from COVID-19 recovered patients but is otherwise identical to the general IVIG production method, so as long as plasma supply is smooth, there should be no issues in product production."