[Asia Economy Reporter Park Jihwan] Hana Financial Investment stated on the 23rd that Seegene's diagnostic kit export growth is expected to continue in the second quarter, and its earnings growth trend is likely to persist. They also emphasized that it is time for a revaluation of the company's value as large-scale investments in future growth engines are underway. The investment opinion 'Buy' was maintained, and the target price was raised by 4% from the previous 250,000 KRW to 260,000 KRW.
Sun Minjung, a researcher at Hana Financial Investment, said, "Seegene's consolidated first-quarter sales are estimated at 352.2 billion KRW, a 331% increase year-on-year, and operating profit is estimated at 188.4 billion KRW, a 374% increase." She added, "Due to slower-than-expected vaccination rates and the emergence of variant viruses, the export growth of diagnostic kits is expected to continue into the second quarter."
Researcher Sun stated, "Last year, the rapid growth caused the pace of cost expenditure to lag behind the sales growth, resulting in an operating profit margin of 60%." She added, "This year, the scale of cost expenditure is also expected to increase in line with the larger scale."
In particular, focusing on strengthening personnel and investing heavily in research and development to invest the 300 billion KRW in cash and cash equivalents into future growth engines, labor costs and R&D expenses are expected to increase by 41% and 100% year-on-year, respectively. The operating profit margin is expected to decrease by about 9.4 percentage points compared to the previous year.
She emphasized, "Seegene is continuously strengthening its workforce with M&A experts and technology development specialists. Based on abundant cash, investments are being made in various ways to secure technologies that can become future growth engines. If these investments become visible, Seegene can no longer remain a low-value stock with a PER of 5 times."
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