[Click e-Stock] Daewoong Pharmaceutical's Nabota Exports Hit Record High... Second-Quarter Results Expected to Exceed Consensus

On July 3, DS Investment & Securities maintained its "Buy" investment rating and a target price of 210,000 won for Daewoong Pharmaceutical, stating that the company is expected to surpass market expectations for its second-quarter results due to record-high exports of its botulinum toxin (Botox) product, Nabota.

According to the report, Daewoong Pharmaceutical's standalone sales for the second quarter are estimated at 345.1 billion won, with operating profit projected at 59.5 billion won. These figures represent increases of 6% and 20%, respectively, compared to the same period last year. The results are also expected to exceed consensus estimates, which stand at 325.5 billion won in sales and 49.6 billion won in operating profit. DS Investment & Securities analysts Kim Minjeong and Kang Taeho explained, "Exports of Nabota, a high-margin product, are expected to reach 59.6 billion won, up 32% year-on-year, marking an all-time quarterly high." They added, "This is due to shipments to North American partner Evolus, which were deferred from the first quarter, as well as increased Botox orders following Evolus's independent filler launch in April."

Pexuclu (a treatment for gastroesophageal reflux disease) is expected to post sales of 21.8 billion won in the second quarter due to the impact of a price reduction. However, the company anticipates that aggressive marketing efforts from the second half of the year will drive a significant increase in market share (M/S). DS Investment & Securities estimates full-year sales at 1.3531 trillion won and operating profit at 172.5 billion won, including 226.9 billion won from Nabota and 112.1 billion won from Pexuclu. For Nabota, the company forecasts continued strong growth in the second half, supported by rising demand in emerging markets such as Thailand, Brazil, and the Middle East.

The analysts stated, "Despite increased expenses from expanded research and development (R&D), the growing proportion of high-margin products is expected to sustain solid profit growth." They further analyzed, "In particular, if Nabota receives approval in China and Pexuclu secures authorization in China in the second half, there will be additional upside potential for earnings."

They added, "Even considering the litigation risk related to the toxin, the current share price remains in an attractive undervalued range."