[Click eStock] "Hugel, Operating Profit Exceeds Market Expectations by 30%"

Daol Investment & Securities named Hugel as the top pick in the medical device sector on the 8th. Considering the trend of improving performance, it was evaluated that the stock price is still in an undervalued range.

Ampoule 3 types from Hugel's high-end cosmetic brand 'Byrizen BR'
[Photo by Hugel]

Hugel achieved sales of 95.4 billion KRW in the second quarter, a 17% increase compared to the same period last year, and operating profit of 42.4 billion KRW, up 52%. The operating profit exceeded market expectations by more than 30%.

Jonghyun Park, a medical device analyst at Daol Investment & Securities, said, "The increase in exports of toxin and filler led to improved performance," adding, "Toxin sales were particularly strong in the Asia-Pacific region, including China and Australia."

Analyst Park diagnosed, "By reducing labor and research and development (R&D) costs through savings in ITC litigation expenses and workforce restructuring at the U.S. subsidiary, a high operating profit margin of 44.5% was achieved."

He forecasted, "With continued strong exports to China, toxin sales in the Asia-Pacific region are expected to increase by about 50% in the third quarter," and "sales in North and South America are projected to decrease by 35% to 7 billion KRW."

He added, "Although there were concerns about overvaluation due to the significant rise in Hugel's stock price, with improved performance, the price-to-earnings ratio (PER) for next year is only 18.8 times," and "we maintain a 'Buy' investment rating and a target price of 350,000 KRW."