[Click eStock] "Seegene Undergoing Structural Change... Need to Confirm Post-Corona Strategy"

[Asia Economy Reporter Lee Myunghwan] Daishin Securities announced on the 23rd that it has newly issued a buy rating and a target price of 53,000 KRW for Seegene, citing the company's outstanding molecular diagnostic technology and expected growth potential.

Daishin Securities views the company's 'post-COVID' strategy as both organic and inorganic growth. It explained that Seegene plans to respond to the post-COVID era by strengthening syndromic testing and non-COVID diagnostics. It also analyzed that Seegene's competitive advantage lies in its multiplex technology, which can detect multiple target genes simultaneously, and expects sales growth from multiplex diagnostic reagents utilizing this technology. The company is expected to offset the gap in COVID-19 diagnostic test sales demand after the endemic period with competitive products. It also noted that the non-COVID market before the COVID-19 pandemic was a high-growth business segment growing at 20-30% annually.

Entry into the U.S. molecular diagnostics market is ongoing, with product approvals and sales expected to accelerate from next year. Based on approximately 600 billion KRW in cash and cash equivalents, mergers and acquisitions (M&A) aimed at strengthening in vitro diagnostics capabilities and regional expansion are anticipated.

However, Daishin Securities advised a conservative approach to performance from the second quarter onward as the post-COVID strategy is confirmed. The company estimates Seegene's sales this year to be 886 billion KRW, down 35.4% from last year, and operating profit to be 391.8 billion KRW, down 41.2%. The operating profit margin is expected to be 44.2%. Since COVID-19-related sales have declined since March, a conservative approach is recommended for the second and third quarter results. Seegene's COVID-19-related sales are estimated to account for about 80% of total sales.

Researcher Han Songhyeop of Daishin Securities analyzed, "If the post-COVID strategy is successfully realized after the fourth quarter, high quarterly sales growth is expected."