[Click eStock] JV M, Smiling with Both Earnings and Intipham Momentum

[Asia Economy Reporter Lee Seon-ae] Daishin Securities on the 14th newly recommended a 'Buy' rating for JV M and set a 6-month target price of 22,000 KRW for the first time. The target price was calculated by applying a target price-to-earnings ratio (Target PER) of 18 times to the 12-month forward earnings per share (EPS) of 1,245 KRW.

Researcher Lee Saerom of Daishin Securities stated, "This is based on expectations of accelerated growth in scale and improvement in operating profit margin in the second half, increased domestic Intipham demand after COVID-19, and expansion of telemedicine accelerating the introduction of North American pouch-type dispensers," adding, "The 12-month forward PER of 13 times is at the historical valuation bottom level and normalization is necessary."

JV M is the leading domestic automated dispensing specialist and a subsidiary of Hanmi Pharmaceutical. The automated dispensing device can automatically classify, dispense, and package medicines when a prescription is scanned. Due to the continued impact of COVID-19 until the first half of 2021, the stock price has been trading at the historical valuation bottom level. The target price reflects the average valuation level of domestic medical device companies.

Regarding sales and operational characteristics by region, the company experienced a slowdown in performance growth due to COVID-19 from the second half of last year through the first half of this year. However, from the third quarter, it is expected to recognize 2 billion KRW in export revenue deferred due to shipment issues in the previous quarter, along with steady domestic and European performance and a recovery in the U.S. market. Due to the seasonal peak effect in the fourth quarter, consolidated sales for the second half are expected to reach 68.1 billion KRW, an increase of +33.7% compared to the first half and +20.2% year-over-year.

In particular, the ADC fully automated drug management device Intipham accounts for a low single-digit percentage of sales due to price burden. However, new demand expansion is expected due to medical staff shortages caused by COVID-19 and the need to improve operational efficiency in tertiary hospitals.