[Click e-Stock] "PharmaResearch Needs Rejuran Sales Rebound for Share Price Recovery"

On February 5, Kiwoom Securities stated that for PharmaResearch's share price to rebound, it is necessary to see a recovery in both sales and traffic for the medical device "Rejuran," and accordingly lowered its target price by 17% from the previous level to 580,000 won.

Shin Minsu, an analyst at Kiwoom Securities, said, "Fourth-quarter results came in with sales of 142.8 billion won and operating profit of 51.8 billion won, falling short of market expectations by 8% and 20%, respectively."

Analyst Shin explained, "The medical device 'Rejuran' underperformed expectations in both domestic and export markets," adding, "The cosmetics lineup filled part of the gap, but it was not enough to meet the consensus."

Regarding the reasons why the results significantly undershot even Kiwoom Securities' own earnings estimates, which were calculated more conservatively than market expectations, Analyst Shin said, "The causes included a structural slowdown in sales, a 5 billion won decrease due to changes in revenue recognition accounting standards, increased R&D expenses related to anticancer drug development and clinical trials for 'Rejuran' in Japan, and higher advertising and promotion expenses for TV commercials of the 'Rejuvenex' cream ointment."

On the sluggish domestic performance of Rejuran, he assessed, "The return of medical staff has been slower than expected, and the shortage of healthcare providers is still continuing," and added, "On top of that, domestic competition has intensified, and although the company is benefiting from an increase in foreign tourists, the strength of this effect has weakened due to factors such as value-added tax refunds."

Analyst Shin stressed, "The Google Trends index, foreign ownership ratio, and valuation indicators have all clearly entered a downward trend," and added, "For the share price to rebound, Rejuran's sales and traffic need to recover."