[Click eStock] "Novarex Achieves Record-High Quarterly Export Performance"

On May 15, DS Investment & Securities raised its target price for Novarex from 16,000 won to 20,000 won, stating, "Novarex posted record-high quarterly export results in the first quarter, and K-health functional food ODM also delivered a surprise."

Novarex, which operates an ODM and OEM business for health functional foods, announced its first-quarter results the previous day based on consolidated financial statements, reporting sales of 90.7 billion won and operating profit of 8.4 billion won. These figures represent sharp increases of 60% and 138%, respectively, compared to the same period last year. In particular, export sales surged by 85% to 31.4 billion won, setting a new record for the highest quarterly export performance. Sales to major customers in China reached 24 billion won, maintaining solid growth. In addition, the company is seeing growth in global export performance to Southeast Asia and other regions through product localization, optimization of pricing policies, and quality strategies. In the first quarter, the share of overseas sales in Novarex's total revenue was 35%, up 5 percentage points from the same period last year. The overseas sales proportion in Novarex's revenue expanded from 7% in 2021 to 31% last year, and is expected to increase to 36% this year.

Analyst Jang Jihae commented, "With the growth of China's online direct purchase channels, domestic health functional food ODM companies are being chosen as production bases for both Chinese local and global brands." She analyzed this trend as being due to "not only geographical advantages but also the acquisition of internationally recognized quality management and assurance systems." She added, "Novarex is securing quality and price competitiveness through semi-automation and smart factory plants, and is achieving product differentiation and a virtuous cycle of export performance growth based on industry-leading individually recognized ingredients and material competitiveness, as well as securing references from the growth of major Chinese clients."