'Withdrawal of Spin-off' PharmaResearch, Target Price Raised on Strong Performance Outlook

[Financial News] Securities firms are successively raising the target price for PharmaResearch. The decision to withdraw the 'spin-off' that had raised market concerns was made, and with the expectation of record performance in the second quarter, the outlook is being raised.
According to the financial investment industry on the 11th, Korea Investment & Securities raised PharmaResearch's target price by 47% on this day. The previous target price of 4.9 million won was raised to 7.2 million won. On the 9th, DB Securities, Kyobo Securities, and Daol Investment & Securities each raised PharmaResearch's target price. Daol Investment & Securities set it at 7.1 million won, while DB Securities and Kyobo Securities set it at 7 million won and 6.5 million won, respectively.
The reason for the increase in the target price is largely due to PharmaResearch's decision to withdraw the spin-off. On June 13, PharmaResearch announced a plan for a spin-off. The plan involved splitting into a holding company 'PharmaResearch Holdings' for investments and a new company 'PharmaResearch' to continue the existing aesthetic business.
However, the market reaction was cold. Criticism arose that it was a 'split listing' to strengthen the control of major shareholders, and concerns about the potential damage to shareholder value expanded. As a result, PharmaResearch decided to withdraw the spin-off plan through a board meeting on the 8th of this month.
Ji-eun Kim, a researcher at DB Securities, evaluated, "With PharmaResearch withdrawing the spin-off decision, concerns about the separation of the toxin business of the actual business entity PharmaResearch and the loss of business momentum due to existing mergers and acquisitions have been resolved."
The expectation of record performance in the second quarter is also a factor adding to the anticipation. According to financial information company FnGuide, the consensus (market forecast) for PharmaResearch's operating profit in the second quarter is currently 51 billion won, up from 41 billion won three months ago and 47 billion won one month ago. The market's expectations for performance are steadily rising.
Sion Kang, a researcher at Korea Investment & Securities, said, "Despite the high sales base in Korea, the growth trend of Rejuran based on domestic and foreign demand is not slowing down at all," adding, "Although advertising costs are expected to increase by 40% compared to the previous quarter due to new advertising costs in the second quarter, the increase in sales is expected to offset this, recording a high operating profit margin of 40.7%."
PharmaResearch is expected to continue its high growth trend in the second half of the year. With entry into major European countries, new sales are expected to occur in the fourth quarter, and the fourth quarter is also a time when the seasonal peak effect is added.
Researcher Kang said, "In major European countries, the selection of distributors is expected to be completed in the third quarter, and new sales are expected to come out in the fourth quarter," adding, "As the export scale is still small compared to domestic demand, simply expanding the number of countries can achieve high export growth."


hippo@fnnews.com Chan-mi Kim, Reporter