[Click eStock] "PNK Benefits from Frontline Market Activation"

Sangsangin Securities analyzed on the 26th that P&K Skin Clinical Research Center is expected to benefit from the activation of the upstream industry. No investment opinion or target price was presented.

P&K Skin Clinical Research Center primarily conducts human application tests to verify the safety, functionality, and efficacy of skin-applied products such as cosmetics, health functional foods, and beauty devices.

Kim Hyemi, a researcher at Sangsangin Securities, stated, "As exports of related domestic companies have recently surged, the activation of the upstream industry is expected to act as an opportunity factor for P&K as well," adding, "This is because new product launches and new company entries lead to an increase in the number of human application tests."

She also evaluated positively that as the major export countries of the products diversify, the demand for tests that meet the certification standards of each country is increasing. She emphasized, "In the case of sunscreen, which is highlighted during the peak season, it is classified as OTC (over-the-counter drug) in the United States and is subject to strict standards, so preemptive human application tests by companies to prepare for this are essential."

Sangsangin Securities explained that P&K aims to achieve record sales this year. She said, "P&K's business goal this year is to surpass the all-time high sales of 18 billion KRW and achieve an operating profit margin of 20-25%."

She mentioned, "A downside is that the test unit price per case has decreased compared to the past due to the increase in competitors," but explained, "P&K provides subscription services (large-scale annual orders) to its trading companies to secure stable performance and is expanding the high-priced health functional food category."

She added, "The sluggish activities of large hospitals, the hangover relief advertising regulation to be implemented from next year, and the growth of the beauty device market are expected to further strengthen the company's business diversification," emphasizing, "Although sales in the second quarter of this year are expected to slightly decline due to recognition of progress despite the recent increase in order backlog, growth is expected to accelerate in the second half of the year."