[Market Focus] Novarex Hits Record High on Expectations of All-Time Best Performance

As of 9:40 a.m. on June 2, shares of Novarex, a company engaged in health functional food ODM·OEM business on the KOSDAQ market, rose 15.52% from the previous closing price to 17,790 won, marking a new 52-week high. This appears to be due to expectations for improved performance, such as the announcement of record-high overseas quarterly sales for the first quarter.

Previously, DS Investment & Securities raised its target price for Novarex from 16,000 won to 20,000 won, stating, "Novarex achieved its highest-ever quarterly export performance in the first quarter, and K-health functional food ODM also delivered a surprise."

On May 14, Novarex announced its first-quarter results 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 quarterly export performance.

Exports, which stood at 33.3 billion won in 2022, nearly tripled to 91.2 billion won last year. The number of countries traded increased to 15, and the number of clients rose to 32. The proportion of overseas sales in Novarex's total revenue expanded from 7% in 2021 to 31% last year. DS Investment & Securities forecasts that this ratio will increase to 36% this year.

Analyst Jang Jihae commented, "Novarex is securing quality and price competitiveness through semi-automation and smart factory operations. Leveraging industry-leading individually recognized ingredients and raw material competitiveness, the company is achieving product differentiation. In addition, by securing references through the growth of major clients in China, a virtuous cycle of export performance growth is emerging."

The decline in sales of Kolmar BNH, a domestic competitor, also appears to have increased attention on Novarex. Recently, Kolmar Group has been embroiled in a management dispute between Vice Chairman Yoon Sanghyun of Kolmar Holdings and President Yoon Yeowon of Kolmar BNH, who are siblings. Kolmar Holdings is demanding changes to the Kolmar BNH board of directors, citing poor performance and other reasons.