[Click eStock] "Neocrema Achieves 285% Plant Utilization...Emerging as a Key Player in the Global Obesity Treatment Supplement Market"

On August 27, Hanyang Securities analyzed that Neocrema is emerging as a key player in the global obesity treatment supplement market.

Neocrema, a company specializing in functional sugars and peptide ingredients, was listed on KOSDAQ in 2019 and focuses on functional sugars, functional peptides, and product sales as its main businesses. In the first half of this year, functional peptides accounted for 39.5% of sales, functional sugars 15.4%, products 36.3%, and others 8.8%. Among these, functional peptides are used as ingredients in obesity treatment supplements and have recently shown explosive growth.

In particular, Neocrema's proprietary core ingredient, 'DNF-10,' is a low-molecular-weight yeast peptide that has clinically proven safety and efficacy, and has obtained global certifications such as FDA GRAS, Non-GMO, and Korea's Ministry of Food and Drug Safety individual recognition.

Lee Joonseok, a researcher at Hanyang Securities, explained, "Since beginning commercialization in 2008, Neocrema has expanded exports to major markets such as Japan, and recently, with the growing demand for obesity treatment supplement ingredients, has entered markets in the United States and Europe, maximizing its sales."

The global obesity treatment market has entered a phase of structural growth due to the spread of new GLP-1 drugs. The market size is expected to expand from $6.7 billion in 2023 to between $95 billion and $150 billion by 2030. However, despite the weight loss effects, gastrointestinal side effects and risks of nutritional imbalance have been reported, leading to a rapid increase in demand for GLP-1 combination supplements.

Researcher Lee emphasized, "While protein, probiotics, and ginger extract are being used as health supplement ingredients, they are mainly limited to nutritional supplementation. In contrast, DNF-10 has been clinically proven to reduce body fat by inhibiting fat synthesis, and is gaining attention as a differentiated ingredient that also alleviates GLP-1 side effects."

Neocrema's performance also supports this. In the first half of this year, the company posted record-high standalone results, with sales of 16.4 billion won, operating profit of 2.9 billion won, and an operating profit margin (OPM) of 17%. Exports surged 289% year-on-year to 6.3 billion won.

Researcher Lee assessed, "Amid expanding demand for supplementary ingredients due to the spread of new GLP-1 drugs, DNF-10, with its focus on body fat reduction and a no-side-effect profile, entered full-scale commercialization in the fourth quarter of last year through supply to a major global distributor."

Given that domestic obesity treatment companies are receiving valuations in the hundreds of billions to trillions of won despite not having clear results yet, there is analysis that Neocrema's current stock price is extremely undervalued.

Researcher Lee added, "A plant utilization rate of 285% not only demonstrates strong demand but also highlights the need for expansion. With future increases in production capacity (CAPA), Neocrema's ability to respond to global demand will be strengthened. Based on the growth potential of DNF-10 and the momentum for expansion, Neocrema has the potential to emerge as a key player in the global obesity treatment supplement market."