[Click eStock] "HL Science, Strength in Developing Functional Individual Recognition Ingredients"

[Asia Economy Reporter Eunmo Koo] KB Securities evaluated HL Science as having strengths in developing individually recognized functional ingredients and expects expansion in the business-to-business (B2B) sales sector based on its ingredient development capabilities.

HL Science is a company that researches, develops, and manufactures functional ingredients using natural substances, health functional foods, and new drugs. Its main products include a diverse lineup such as "Red Pomegranate (menopausal women's health)," "Dr. Super Can (liver health)," "Dr. Super Lutein (eye health)," "Organic Sprout Barley Juice Powder (body constitution improvement)," and "Dr. Green Propolis (immune enhancement)."

In the second quarter of this year, sales increased by 1.4% compared to the same period last year to 38 billion KRW, while operating profit decreased by 32.4% to 5 billion KRW. Researcher Im Clinical from KB Securities explained, "The significant decrease in operating profit relative to sales was due to increased outsourced research and development expenses and advertising costs," adding, "These proactive expenses incurred from new product development and hiring new advertising models are expected to lead to an expansion of the product lineup and increased brand awareness in the future."

HL Science is evaluated as having strengths in developing individually recognized functional ingredients. Consumer interest in health functional foods continues to grow, and products related to immune enhancement and dieting consistently remain popular. Researcher Im stated, "The ability to develop individually recognized ingredients is HL Science's greatest strength," and explained, "They are actively diversifying their product portfolio by quickly launching new functional ingredient products with high consumer recognition, such as Cissuslow Diet (body fat reduction) and Usul Secret (joint and cartilage health)."

Expansion of B2B sales based on ingredient development capabilities is also expected. Researcher Im forecasted, "In the second quarter, the B2B sector supplied functional pomegranate concentrate, significantly increasing other segment performance," and added, "Once ingredient sales negotiations are completed, diversification of sales channels is anticipated."

However, the continuous need for ingredient development and new product launches was pointed out as a risk factor. Researcher Im explained, "The health functional food market is one where consumer demand rapidly changes according to ingredient trends," emphasizing, "The ability to develop trend-leading ingredients and marketing is crucial."