NH Investment & Securities on the 21st lowered the target price for Daewoong Pharmaceutical from 175,000 KRW to 145,000 KRW, a decrease of about 17%. The target price for Daewoong Pharmaceutical has fallen three consecutive times since July last year (260,000 KRW). However, the investment opinion remains 'Buy'.
Daewoong Pharmaceutical's sales revenue for the first quarter of this year (on a separate basis) is expected to be 297.6 billion KRW, with an operating profit of 28.8 billion KRW. This represents increases of 9% and 7%, respectively, compared to the same period last year, generally in line with market expectations.
Daewoong Pharmaceutical is currently engaged in a legal dispute over the manufacturing technology of Nabota with its competitor Medytox. In February, Medytox won part of the civil first trial, and Daewoong Pharmaceutical immediately appealed. Nevertheless, regardless of the lawsuit, Nabota export performance continues steadily. In January, export revenue reached 11.17 million USD, marking the second time since last July that monthly exports exceeded 10 million USD.
NH Investment & Securities pointed out that while responding to the Nabota lawsuit, Daewoong Pharmaceutical must also achieve results through other new drug developments. In particular, results are urgently needed for VersiProsine (idiopathic pulmonary fibrosis), which is currently in phase 2 clinical trials in the United States.
Researcher Park Byung-guk of NH Investment & Securities explained the reason for lowering the target price, stating, "The EV/EBITDA multiple applied to the Nabota business division's value was lowered by excluding Medytox from the peer group of the Nabota business division. We judged that companies that won or lost in the domestic civil first trial are difficult to consider as peers in terms of multiples."
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