[Click eStock] "Green Cross: Aliglo Growth and Subsidiary Efficiency Drive Target Price Up to 210,000 Won"

On January 16, DB Securities analyzed that Green Cross is expected to return to profitability in the fourth quarter of last year, ending an eight-year streak of losses. The company explained that the sharp growth of the high-margin blood product "Aliglo" and the management efficiency improvements of its subsidiaries are now being fully reflected, leading to an improved earnings structure. Accordingly, the target stock price was raised to 210,000 won.

Lee Myungsun, a researcher at DB Securities, stated, "Fourth-quarter results last year are expected to show sales of 488.7 billion won, up 10.8% year-on-year, and an operating profit of 2.2 billion won, marking a turnaround from a loss in the same period the previous year. This turnaround is anticipated due to the strong performance of high-margin Aliglo and the management efficiency gains of subsidiaries, which differ from previous estimates."

Since 2018, Green Cross had recorded losses in every fourth quarter due to the concentration of selling and administrative expenses, research and development costs, and incentive payments, compounded by vaccine disposal costs. However, starting this year, as Aliglo sales become concentrated in the second half, fourth-quarter profitability is expected to improve significantly.

The growth momentum of Aliglo is expected to continue next year. DB Securities estimates Green Cross's sales this year will reach 2.0953 trillion won, up 5.7% from the previous year, with operating profit rising 28.3% to 85.8 billion won. The operating margin is projected to improve to around 4.1%. Despite intensifying global competition in the influenza vaccine market, the launch of new vaccines and increased exports of blood products are expected to drive earnings growth.

The expansion of the U.S. blood center business is also cited as a mid- to long-term growth engine. Currently, one blood center in Texas is expected to receive FDA approval in the first half of the year, with another center planned to open next year. Notably, from 2028, it is expected that about 80% of the plasma raw materials for Aliglo will be self-supplied, which should further enhance profitability by improving the cost structure.

Subsidiary restructuring and cost efficiency improvements are also contributing to better results. The strategy of focusing on selected new drug development and cost efficiency is yielding visible results, leading to a stabilization of the overall profit structure.