[Click eStock] "Dongkook Pharmaceutical, 'Cosmetic Effects' Expected to Achieve Record High Performance This Year"

Target Price Maintained at 23,000 KRW

Dongkook Pharmaceutical is expected to achieve its highest performance this year due to the growth of its healthcare business, including cosmetics.

On the 5th, Hong-sik Jeong, a researcher at LS Securities, said about Dongkook Pharmaceutical, "Both sales and operating profit are expected to set new records this year," adding, "In particular, operating profit is expected to grow rapidly by 15-20% compared to the previous year as the operating profit margin improves significantly this year." The investment opinion was maintained as 'Buy' with a target price of 23,000 KRW.

He cited the improvement in profitability of the healthcare sector as the reason. Researcher Jeong analyzed, "The proportion of highly profitable direct online malls and offline stores in the cosmetics business is expanding, while the relatively less profitable home shopping proportion is decreasing, leading to a reduction in sales commissions," and added, "The efficient execution of marketing expenses, such as a decrease in the proportion of advertising expenses, will also have an impact."

On the same day, Taegi Ha, a researcher at Sangsangin Securities, also forecasted, "As the healthcare business including cosmetics grows rapidly, the consolidated sales this year are expected to grow by over 10% due to the reflected operating results of Withnix and Ribom Cosmetics, which were acquired last year." Based on 2023, Withnix's sales are around 5 billion KRW, Ribom Cosmetics has sales of 22.5 billion KRW and operating profit of 3.5 billion KRW. Researcher Ha said, "These companies are expected to be fully reflected in the consolidated results this year, leading to an increase in consolidated sales." He also predicted a double-digit growth in prescription drugs and stable performance in over-the-counter drugs.

Meanwhile, Dongkook Pharmaceutical's consolidated sales last year are estimated to have increased by 10.3% year-on-year to 806.5 billion KRW, and operating profit increased by 25.5% to 83.9 billion KRW.