[Click eStock] "Medytox, Turnaround Starting Q1... Stock Price Has 35% Upside Potential"

Kyobo Securities Sets Target Price at 190,000 KRW

Kyobo Securities forecasted on the 3rd that Medytox's earnings will begin to rebound in earnest starting from the first quarter of this year, issuing a 'Buy' investment rating and a target price of 190,000 KRW.

Researcher Jeong Hee-ryeong of Kyobo Securities stated, "We estimate that first-quarter sales will increase by 1.7% year-on-year to 55.5 billion KRW, and operating profit will turn positive at 3.7 billion KRW," adding, "The earnings turnaround will begin from the first quarter."

The turnaround factors cited include ▲expansion of toxin exports due to increased medical tourism to Brazil ▲expansion of coverage with Brazilian partner companies ▲deferred demand arising from GMP (Good Manufacturing Practice) improvements in the fourth quarter of last year ▲entry into the NewLux markets in Thailand and Peru ▲expansion of domestic distributors and increased inbound demand.

Researcher Jeong predicted, "From the second quarter of this year, the addition of new NewLux volumes will accelerate earnings improvement," and added, "Although sales declined in the second half of last year due to GMP improvements and suspension of distributor transactions, this year will see meaningful growth compared to the previous quarter."

Cost burdens are also expected to decrease. Legal expenses related to the ITC (U.S. International Trade Commission), which amounted to 20 billion KRW annually last year, are expected to decrease to about 1.5 billion KRW per quarter following the conclusion of the main trial. Although there is a clinical cost burden of about 1.5 billion KRW per quarter due to the consolidation of the subsidiary 'Rebiome,' it is analyzed that this will be offset by operating leverage effects from the operation of the third plant.

Researcher Jeong stated, "Despite the poor performance in the fourth quarter of last year, Medytox's stock price did not fall significantly and is judged to have confirmed a short-term bottom," and forecasted, "In the second quarter, as large shipments from toxin companies are scheduled, investment sentiment across the industry will improve along with the release of export-import data."

Medytox, established in 2000 and listed on KOSDAQ in 2009, is a global leading aesthetic medical company. It owns four types of botulinum toxins (NewLux, Meditoxin, Coretox, Innotox) as well as hyaluronic acid filler brands Newramis, Attier, and Potenfill. It closed trading the previous day at 140,900 KRW.