[Click eStock] "ST Pharm Expected to Sustain Growth in Second Half"

On September 12, IBK Investment & Securities analyzed that ST Pharm is expected to continue its growth trend in the second half of the year. The company maintained its 'Buy' investment opinion and raised the target price to 130,000 won.

IBK Investment & Securities forecast that ST Pharm will record sales of 326.7 billion won and operating profit of 48.6 billion won this year. This represents an increase of 19.3% and 75.6%, respectively, compared to the previous year.

Jung Isu, a researcher at IBK Investment & Securities, said, "In the first half of the year, the supply of raw materials for blood cancer treatments, which are high-margin products, expanded. As a result, oligonucleotide sales increased by 39.1% year-on-year, driving consolidated sales growth and improved profitability."

The company is expected to maintain its growth in the second half as well. However, growth is projected to slow in the third quarter. He explained, "We expect the supply volume of oligonucleotide active pharmaceutical ingredients to be concentrated in the fourth quarter. This is due to the increased depreciation burden as clinical sample production began at the newly expanded Second Oligonucleotide Plant from July."

He added, "In the fourth quarter, as commercial-scale production ramps up, both sales and profitability are expected to improve. We believe the operating margin in the fourth quarter could exceed 20%."

He also anticipated that the company's mid- to long-term growth momentum would strengthen. As of the end of June this year, the order backlog for oligonucleotide active pharmaceutical ingredients stood at 243.22 million dollars, accounting for 82.4% of total orders. This is a 57.7% increase compared to the end of 2024.

He emphasized, "The rare disease treatment Olezarsen announced positive top-line data from its Phase 3 clinical trial for severe hypertriglyceridemia. We expect the supply of raw materials to expand as indications are broadened in the future." He continued, "Interim results from the Phase 2a clinical trial for the AIDS treatment will be presented at IDWeek, the Infectious Diseases Society of America conference, on October 20. Research and development (R&D) events are also on the horizon."