LNcBio is showing strong performance. The news that its price-to-earnings ratio (PER) will be calculated by applying a 10% premium to the average multiple from 2019, when Pharmaresearch's medical device sales began to grow in earnest, appears to be impacting the stock price. Pharmaresearch's stock price has risen by 1,890% over six years since 2019. Eugene Investment & Securities has set a target price for LNcBio at 68,000 won. The firm estimates that LNcBio will surpass 100 billion won in sales next year and exceed 1.1 trillion won in sales by 2029.
As of 9:53 a.m. on September 9, LNcBio was trading at 50,400 won, up 2.96% from the previous trading day.
Lee Chaeun, a researcher at Eugene Investment & Securities, said, "The target price was calculated by applying a target PER of 25 times to the consolidated net profit for 2027," adding, "The target multiple was set by adding a 10% premium to the average multiple in 2019, when Pharmaresearch's medical device division was at the beginning of its sales growth."
She continued, "In 2019, the skin booster market was just beginning to emerge," and added, "Now, things are different." She emphasized, "Not only is domestic demand growing rapidly, but inbound demand from tourists is also increasing quickly. This marks the beginning of the second phase of market emergence, now expanding overseas." She further stated, "A 10% premium was given to reflect the market growth potential."
Lee explained, "In 2020, a joint venture was established with China International Capital Corporation (CICC), and LNcChina was incorporated as a wholly owned subsidiary, securing full control." She added, "Earlier this year, MegaDerm Plus received NMPA approval, making it the first foreign company to enter China's skin graft material market. MegaCarti, a treatment for cartilage defects, also applied for NMPA approval in May last year."
She noted, "The Chinese GMP approval for the production plant in Kunshan, which is worth about 700 billion won, is expected between the end of next year and early 2027. It is likely that a sales contract for the Chinese subsidiary will be signed within the third quarter." She emphasized, "LNcChina's sales will begin in earnest in the second half of this year, and a significant increase in sales is expected from 2027, when the Chinese plant begins full-scale operations."
Lee analyzed, "From 2020 to 2022, expectations for entry into China were strongly reflected in the stock price, with multiples applied ranging from 60 to 150 times." She added, "Now, as LNcChina's sales become visible in the second half of this year and the rapid growth of Lituo is added, the stock price is expected to rise based on actual performance rather than mere expectations."
LNcBio reached an all-time high of 155,600 won on October 6, 2020.
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