[Click e-Stock] "Green Cross Misses Q2 Market Expectations... Target Price Lowered"

DB Financial Investment Lowers Green Cross Target Price to 195,000 Won

On August 4, DB Financial Investment lowered its target price for Green Cross from 230,000 won to 195,000 won, citing second-quarter results that fell short of market expectations, while maintaining a 'buy' investment rating.

DB Financial Investment stated, "Although Green Cross Wellbeing is excluded from consolidated subsidiaries this year, keeping annual results in line with last year, we are maintaining our buy rating as 'Aliglo,' a treatment for congenital immunodeficiency, is performing well, and plans are in place for the commercialization of subcutaneous immunoglobulin (SCIG) 20% and Amezosvathane by 2030." The firm added, "However, given an adjustment in multiples as a result of poor share price performance in line with other pharmaceutical peers, we are lowering our target price."

Green Cross’s second-quarter results showed sales of 421.2 billion won (down 15.6% year-on-year) and operating profit of 1.7 billion won (down 93.8%). Operating profit fell short of the market expectation of 13.6 billion won. DB Financial Investment pointed to delays in high-margin Aliglo and influenza vaccine bulk sales, as well as Hunterase export supplies being concentrated in the fourth quarter, as causes. The brokerage expects vaccine sales to improve notably in the third quarter and prescription pharmaceutical sales to rebound in the fourth quarter.

Despite the weak second-quarter results, DB Financial Investment stated that its annual estimates for Green Cross remain unchanged. This optimism is attributed to the seasonal benefits of influenza vaccines and the upcoming receipt of proceeds from the sale of affiliate 'Curevo' to Eli Lilly in the United States, which will drive improvement in profits.

The proceeds from the Curevo sale are expected to be used for the development and expansion of 20% SCIG production facilities. With demand for SCIG rising among young people in the United States, Green Cross plans to file an IND for a Phase 3 clinical trial next year and aims for commercialization in 2030, further working to develop competitive products.

Additionally, the company stated that Amezosvathane (Curevo’s shingles vaccine), which is set to enter Phase 3 clinical trials next year and targets commercialization by 2030, is expected to generate contract manufacturing (CMO) sales and royalty income as a result.

This content was produced with the assistance of AI translation services.