[Click eStock] "Daewoong, Key Subsidiaries Sailing Smoothly"

Daewoong Pharmaceutical and Daewoong Bio Expected to Maintain Strong Performance Through 4Q

[Asia Economy Reporter Minwoo Lee] Daewoong achieved better-than-expected solid results in the third quarter this year, supported by the strong operating performance of its key subsidiaries.

On the 22nd, KTB Investment & Securities upgraded Daewoong's investment rating from 'Neutral (HOLD)' to 'Buy' due to this background. The target price was maintained at 38,000 KRW. The closing price on the previous trading day was 30,700 KRW.

Daewoong recorded consolidated sales of 376.3 billion KRW and operating profit of 48.1 billion KRW in the third quarter of this year. This is attributed to a 7% and 17% increase in sales of its key subsidiaries, Daewoong Pharmaceutical and Daewoong Bio, respectively. Daewoong Pharmaceutical saw Nabota sales increase by approximately 9.6 billion KRW year-on-year due to strong exports, while Daewoong Bio's key CNS product sales rose by about 4.8 billion KRW following a recovery in the domestic prescription market.

Operating profit also hit a record high on a quarterly basis. Excluding litigation costs, Albis disposal costs, and regular development expenses, Daewoong Pharmaceutical's standalone operating profit exceeded expectations at 23.9 billion KRW, driven by increased Nabota revenue contribution. Daewoong Bio also recorded its highest quarterly operating profit of 21.9 billion KRW with an operating margin of 22.4%. Accordingly, cumulative sales from the first to third quarter reached 282.6 billion KRW, an 11% increase compared to the same period last year. Cumulative operating profit rose 25% to 58.6 billion KRW during the same period. The strong operating performance trend continues regardless of COVID-19.

Hyerin Lee, a researcher at KTB Investment & Securities, said, "The investment rating was upgraded as the gap between the target price and the current stock price widened to 24%. With the stock price, which had abnormally surged due to COVID-19 treatment development issues, normalizing, Daewoong Pharmaceutical and Daewoong Bio, which account for more than 90% of the net asset value (NAV), are expected to maintain their strong performance trends beyond the fourth quarter."