[Click eStock] "Dongkook Pharmaceutical, Upward Revision of Sales Estimates Across All Divisions... Target Price Up"

[Asia Economy Reporter Hwang Yoon-joo] Shinhan Financial Investment maintained a 'Buy' rating on Dongkook Pharmaceutical on the 19th, expecting growth across all business divisions this year, while raising the target price to 260,000 KRW.

Jung Jae-won, a researcher at Shinhan Financial Investment, stated, "Although the OTC (over-the-counter) division was weak in 2021 due to a decrease in pharmacy visits, it is expected to recover to previous levels from the second quarter when the spread subsided."

Researcher Jung added, "Other business divisions are also expected to show continuous growth," and "Therefore, we anticipate balanced growth across all sectors."

Researcher Jung focused on the growth potential of Dongkook Life Science, a subsidiary. He evaluated, "Sales of the core product, contrast agents, slightly decreased compared to the same period last year, but the decline was offset by new business sectors such as medical devices."

He further explained, "Dongkook Life Science purchased the Anseong plant from Bayer Korea in 2019 to increase contrast agent production, and actual operations are scheduled to begin in the second half of this year," adding, "Once operational, there will be a sales growth momentum due to additional production of active pharmaceutical ingredients (API) and finished products."

Researcher Jung noted, "Dongkook Pharmaceutical's strength lies in its portfolio evenly distributed across OTC, ethical drugs (ETC), and healthcare divisions rather than concentrated in one area," and added, "Although selling and administrative expenses such as labor costs and R&D expenses showed no significant changes from previous estimates, the target price was raised due to upward revisions of sales forecasts across all business divisions."