[Click eStock] "Pharmaresearch, Best Performance Led by Rejuran... Valuation at Historic Low"

[Asia Economy Reporter Kwon Jae-hee] Shinhan Investment Corp. on the 24th gave a 'Buy' rating and a target price of 86,000 KRW for Pharmaresearch.

Pharmaresearch is a company engaged in the research and sales of pharmaceuticals, medical devices, and cosmetics based on tissue regeneration promoting technologies such as 'Rejuran', 'Conjuran', 'Rejubinex Injection', and 'Rian'. As of last year, the sales ratio by business division was 29% pharmaceuticals, 50% medical devices, and 21% cosmetics and others. The medical device division is driving overall corporate growth, supported by strong sales of the blockbuster product Rejuran.

With the launch of the new product 'Rejuran HB', which is expected to continue the blockbuster's reputation, Pharmaresearch has laid the foundation for sustained earnings growth. The price per treatment for Rejuran HB (2cc full face) is approximately 400,000 to 500,000 KRW, which is more than twice the price of the existing product. Considering the high treatment price, the average selling price (ASP) of Rejuran HB is also estimated to be more than twice that of the existing product for the same volume. The high growth of Rejuran HB is expected to contribute not only to future top-line growth but also to profitability improvement. Additionally, the full-scale expansion of Rejuran exports to China is expected to act as a mid- to long-term growth momentum.

Furthermore, the botulinum toxin 'Rientox' is also expected to see earnings growth with the full-scale domestic sales. The domestic product approval application was completed in December 2021, with approval targeted within this year. Along with direct sales, non-exclusive sales rights are expected to be granted to top-tier domestic distributors, diversifying sales channels, which is anticipated to enable rapid market penetration after product launch.

Won Jae-hee, a researcher at Shinhan Investment Corp., stated, "Despite expectations of demand stabilization due to increased awareness of key products including Rejuran, continued operating leverage effects from strong sales of profitable new products, and benefits from exchange rate effects due to expanded export ratios, the valuation remains at a historical low." He added, "Considering the solid growth of Rejuran and the earnings upside from domestic product approval of Rientox, the current stock price offers sufficient investment attractiveness."