[Click eStock] HK Innoen, Performance Recovery from Q2... Expectation of Global Achievements

[Asia Economy Reporter Lee Seon-ae] DB Financial Investment announced on the 12th that it maintains a buy rating and a target price of 52,000 KRW for HK Innoen. The current stock price is 38,500 KRW, indicating an upside potential of 35.1%. This is due to the expected recovery in operating profit starting from the second quarter.

Second-quarter sales are projected to increase by 11.2% year-on-year to 205.6 billion KRW, and operating profit is expected to rise by 447.2% to 16.2 billion KRW. In the ETC business, the launch of K-CAB orally disintegrating tablets (May), approval and launch in China leading to royalty inflows, and in the HB&B business, the effect of new product launches (such as Condition Stick Jelly) and performance improvements in Condition and Hovenia dulcis due to the easing of COVID-19 social distancing are anticipated. From the second half of the year, the start of operations at the new infusion solution plant, royalty inflows from K-CAB entering late-stage clinical trials in the U.S., and increased vaccine sales will further enhance performance. Accordingly, the annual sales forecast of 827.2 billion KRW (7.5% increase) and operating profit forecast of 68.5 billion KRW (36.1% increase) are maintained.

Meanwhile, on the 3rd, the U.S. FDA approved Bonoprazan, the world's first P-CAB class gastric ulcer treatment, for Helicobacter pylori infection treatment with dual therapy (amoxicillin) and triple therapy (amoxicillin, clarithromycin). Combination therapy is targeted for release in the second half of the year, and monotherapy is planned for release in the first half of next year.

Lee Myung-sun, a researcher at DB Financial Investment, emphasized, "With the leading product entering advanced countries and the aggressive sales plan of the Chinese partner company (200 billion KRW in 2023), global achievements can also be expected, so we maintain our investment opinion and target price."