Botox Stocks Soar in Value Amid Major Corporations' Love Calls

Hugel and Others See Double-Digit Surge in Stock Prices

[Asia Economy Reporter Minji Lee] As large corporations such as Shinsegae and GS jump into acquiring botulinum toxin (Botox) companies, the stock prices of related companies are being re-evaluated. Expectations that more consumers will engage in beauty care following COVID-19 vaccinations are also driving stock prices up.

According to the Korea Exchange on the 6th, Hugel, the leading company in the domestic Botox market, saw its stock price rise about 22%, from 209,000 KRW to 246,200 KRW, from last month to the day before. Medytox also surged approximately 41% during the same period, from 169,800 KRW to 240,300 KRW. The increase in demand for beauty care following COVID-19 vaccinations, along with news of large corporations acquiring toxin companies, is interpreted as influencing the stock price rise.

The real spark for the stock price increase was ignited on the 17th of last month when Shinsegae Department Store announced it would acquire 49.2% of Hugel shares held by Bain Capital. On that day, Hugel's stock price surged to an intraday high of 265,000 KRW, setting a new record. Additionally, GS Retail revealed it is considering a minority stake investment in Hugel, leading to a revaluation of Botox companies. Looking at Hugel’s market capitalization, it increased by 565.6 billion KRW since last month, closely chasing HL Biotech (3.5854 trillion KRW), ranked 10th in market cap, while Medytox’s market cap grew by 441 billion KRW during the same period.

Jayang Koo, a researcher at DB Financial Investment, said, "The announcement of Hugel’s share acquisition acted as a trigger for the stock price rise of toxin companies, leading to revaluation. The recovery of aesthetic demand due to vaccine rollouts and the lifting of lockdowns in major countries is also positive." The export volume of domestic Botox companies is growing; although exports in May were 20.4 million USD, down 6.5% from a year earlier, last month’s total exports reached 26.19 million USD, a 76.6% increase compared to the same month last year.

As demand recovery becomes visible, the securities industry is raising expectations for earnings surprises. The estimated operating profit for Hugel in the second quarter is 23.8 billion KRW, a 42% increase. The annual operating profit is projected to rise 34% year-on-year to 105 billion KRW.

Medytox is expected to return to profitability in the second quarter. With the resumption of operations for three toxin products (Coretox, Medytox, Innotox) whose approvals were canceled last year, the annual operating profit is expected to reach 17.6 billion KRW, continuing its profit trend.