[Click e-Stock] "Dong-A Socio Holdings Expected to See Stock Price Rise in Second Half on Subsidiary Earnings"

Target Price Raised

On August 6, Sangsangin Securities stated that it expects the stock price of Dong-A Socio Holdings to rise in the second half of the year, based on the earnings growth of its subsidiaries, and raised its target price from 150,000 won to 170,000 won.

Ha Taegi, a researcher at Sangsangin Securities, explained, "In the second half, the operating performance growth of ST Pharm Bio, expansion of factory facilities, and profitability improvement from the merger of Suseok and Dongcheonsu will become more pronounced, which will have a positive impact on the stock price."

He added, "In the short term, ST Pharm Bio plans to expand its existing factory facilities starting in the third quarter, which will increase its theoretical production capacity (CAPA) by 30 to 40 percent. In the long term, the company is planning to build a second commercial plant externally, thereby securing further growth potential." Regarding the merger of Suseok and Dongcheonsu, he explained, "By establishing an integrated production system from beverage base to packaging, the company is pursuing profitability improvement through efficiency gains."

The stock price of Dong-A Socio Holdings, which had been undergoing adjustments in the 100,000 won range, rose to around 125,000 won at the end of last month, supported by strong first-half results and an improved stock market environment, and is currently at around 110,000 won. Researcher Ha pointed out, "Since the stock price has recently undergone a short-term correction, there is room for it to rise again."

In the second quarter, Dong-A Socio Holdings posted consolidated sales of 346.9 billion won, up 6.9 percent year-on-year, and operating profit of 28.7 billion won, up 28.8 percent. Researcher Ha analyzed that the earnings improvement of Dong-A Pharmaceutical, ST Pharm Bio, and Yongma Logistics played a decisive role.

During this period, Dong-A Pharmaceutical recorded sales of 181.6 billion won and operating profit of 23.9 billion won, driven by the price increase of Bacchus and sales growth in the over-the-counter drug and cosmetics sectors. ST Pharm Bio showed clear growth in the second quarter, with sales rising 230.5 percent to 25 billion won and operating profit reaching 4.3 billion won, thanks to the launch of its new Stelara biosimilar product. Yongma Logistics is also expected to achieve sales of 419.1 billion won this year, up 4.7 percent, and operating profit of around 17 billion won, supported by strong logistics performance in the cosmetics and food sectors.