[Weekly HOT Stocks] Hugel, Rising Foreign Interest... Successful Entry into the Chinese Market

From 19th to 23rd, the 2nd top net purchase stock by foreign investors in the KOSDAQ market... Stock price rises 12% in one week

Hugel's botulinum toxin product 'Letibo' (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] Over the past week, foreign investors' attention was focused on the domestic botulinum toxin preparation company 'Hugel.'

According to the Korea Exchange on the 24th, foreign investors net purchased Hugel shares worth 35.3 billion KRW over the week from the 19th to the previous day. During this period, Hugel ranked second among the top net purchases by foreign investors in the KOSDAQ market.

Hugel is expected to show strong performance in the third quarter. NH Investment & Securities estimated Hugel's consolidated sales for Q3 at 53.6 billion KRW and operating profit at 18.8 billion KRW. Compared to the previous year, sales increased by 4.8% and operating profit by 3.2%. Compared to the previous quarter, sales rose by 11.1% and operating profit by 12.5%.

Researcher Na Gwanjun of NH Investment & Securities said, "In Q3, we expect favorable sales due to the positive spillover effect related to competitor toxin noise," adding, "We estimate toxin and filler exports at 9.3 billion KRW and 11.6 billion KRW, up 35.2% and 27.4% respectively from the previous quarter. After confirming the bottom in Q2, we judge recovery starting from Q3. Recovery in exports centered on Asian regions such as Thailand, Taiwan, and Japan has been confirmed."

Moreover, Hugel became the first domestic toxin company to enter the Chinese market. Hugel announced yesterday that it obtained sales approval for the toxin 'Letybo' from the China National Medical Products Administration (NMPA). Hugel explained, "By obtaining sales approval for Letybo in China, one of the major markets for botulinum toxin products, we expect to make a full-scale entry into the Chinese market and contribute to expanding overseas sales."

In the Chinese toxin market, two products are currently available: Allergan's 'Botox' and the Lanzhou Institute of Biological Products' 'BTX-A.' In June this year, Ipsen's 'Dysport' became the third product approved in China, and Letybo became the fourth.

Researcher Na said, "Since Hugel is entering the Chinese market through its local partner Sahuan Pharmaceutical, we believe there will be no major difficulties in securing market share in China. Sahuan Pharmaceutical plans to directly sell Letybo in three major Chinese cities (Beijing, Shanghai, Guangzhou)," adding, "In 20 major provinces, Sahuan Pharmaceutical plans to sell Letybo through exclusive distributors selected for each province. The initial shipment volume of Letybo to China is expected to be confirmed around early next year."

The stock price rose over the week. The closing price, which was 189,300 KRW on the 16th, closed at 211,600 KRW the previous day. It increased by 11.78% over five trading days.