[Click eStock] "Green Cross, Earnings Forecast Downgraded for Next Year... Target Price Down"

[Asia Economy Reporter Hwang Yoon-joo] SK Securities downgraded its operating profit forecasts for Green Cross for 2022 and 2023 on the 2nd. Accordingly, it maintained a 'Buy' investment rating but lowered the target price to 170,000 KRW.

Researcher Lee Dal-mi of SK Securities stated, "Based on the Q3 earnings announcement, we have lowered Green Cross's operating profit forecasts for 2022 and 2023 by 25.0% and 26.2%, respectively." With the downward revision of earnings forecasts, earnings per share (EPS) were also lowered by 32.0% and 34.2%, respectively.

Previously, Green Cross announced Q3 operating profit and sales of 44.8 billion KRW and 459.7 billion KRW, respectively. These figures represent decreases of 31.8% and 1.3% compared to the same period last year. The operating profit fell short of market consensus by 10.0%. The main cause of the earnings decline was the base effect related to the recognition of COVID-19 vaccine distribution sales in Q3 last year. Additionally, research and development costs increased by 16% due to the commencement of Phase 2 clinical trials for the shingles vaccine in the U.S.

Lee said, "IVIG 10%, which received a Complete Response Letter (CRL) from the FDA in February, is currently coordinating the schedule for an on-site inspection," adding, "There is a high possibility of resubmitting the BLA soon, so the expectations remain valid."

He also added, "Hunterase, which is exported to Japan and China, achieved sales of 53 billion KRW in 2021 and is expected to reach 60 billion KRW in 2022. In 2023, with the full-scale start of sales in China, it is expected to drive growth."