[Click eStock] "SD Biosensor, Diagnostic Kit Demand to Continue Through Next Year"

[Asia Economy Reporter Park Jihwan] Daishin Securities evaluated on the 7th that the popularity of diagnostic kits will continue this year for SD Biosensor, which is scheduled for a new listing this month, and that diagnostic demand is expected to persist until next year.

Kim Hanryong, a researcher at Daishin Securities, stated, "SD Biosensor has demonstrated explosive growth due to increased demand for diagnostic testing," and added, "The rapid test kit Standard Q is being supplied to major countries through supply contracts with Roche and related organizations."

Last year, the proportion of sales related to COVID-19 was about 86%. Based on 2020 data, the regional sales distribution was Europe 41%, India 32%, America 10%, Asia 7%, Africa 5%, and Korea 3%, with 97% of sales generated overseas. Major competitors include Abbott, Siemens, and Becton & Dickens.

It is explained that the popularity of diagnostic kits will continue this year as well. COVID-19 related sales in the first quarter increased by 22.0% compared to the previous quarter, reaching 1.0894 trillion KRW. Sales for this year are expected to increase by 102.2% year-on-year to 3.4101 trillion KRW. Operating profit is expected to rise by 111.0% to 1.5578 trillion KRW. Researcher Kim emphasized, "Despite concerns about sales decline due to vaccination, strong performance was achieved," and added, "Although the COVID-19 vaccination rate is rising, the situation is entering a new phase due to variant viruses, and diagnostic demand is increasing in low- and middle-income countries where testing has not been actively conducted, so demand for COVID-19 related products is expected to continue for the time being." It is forecasted that demand for COVID-19 related products will maintain a certain level until 2022.

In particular, the focus of future performance is expected to shift from diagnostic tests conducted by professional medical personnel to diversified products such as home-use self-diagnostic kits, neutralizing antibody diagnostic kits that check antibody formation after vaccination, and diagnostic kits capable of simultaneously testing for influenza and COVID-19.

Researcher Kim Hanryong stated, "A portion of the cash on hand and public offering funds will be used for new M&A," and added, "The future stock price direction is expected to be determined according to the company's strategic direction through M&A."