Medical Tourism Tailwind Fades... PharmaResearch Needs a New Growth Engine [Click e Stock]

Third-quarter operating profit up 1.5%... Stronger won weighs
Overseas expansion drives up marketing and retail placement costs
"Find new growth drivers and restore profitability"

Rejuran, a product known in dermatology clinics, is reaching customers in cosmetics stores as well. PharmaResearch, a medical aesthetics company, is expanding its cosmetics business by building on the brand’s recognition. But establishing a foothold in the market comes at a cost. A stronger won is also making it harder to capitalize on the K-beauty boom. These factors are behind forecasts that PharmaResearch’s third-quarter results will lose momentum.

On October 21, Samsung Securities lowered its target price for PharmaResearch by 20% to 400,000 won, citing these factors. The previous day’s closing price was 264,000 won. It maintained its “Buy” rating.

Results for the third quarter of 2026 are expected to show somewhat slower growth. Samsung Securities forecast revenue of 171.9 billion won and operating profit of 62.8 billion won, up 26.9% and 1.5%, respectively, from the same period a year earlier. In other words, while revenue is expected to grow by double digits, profit is likely to remain nearly flat. Operating profit is also expected to come in about 14% below the market consensus.

The stronger won is seen as a burden on both domestic sales and exports. First, a stronger won could make domestic treatments less attractive to foreign tourists. Samsung Securities estimated third-quarter spending at dermatology clinics by medical tourists at 360 billion won. That is 20% higher than a year earlier but 19% lower than in the previous quarter. It also forecast that PharmaResearch’s domestic medical device revenue would fall 6.2% from the previous quarter to 60.5 billion won.

Overseas medical device sales are forecast to rise 69.6% from the same period a year earlier to 33.2 billion won. With revenue in Asia entering a stable phase, the company is expected to see modest growth led by Western Europe. The fact that PharmaResearch is securing new demand overseas as domestic growth slows is a positive development.

The challenge lies in how the company is growing revenue. In its existing medical device business, the additional costs incurred after supplying products to distributors were relatively limited. Cosmetics, by contrast, require directly targeting major online and offline sales channels. “It is positive that the company has expanded into new business areas and grown new revenue streams more than other companies in the same sector. However, rising channel costs, including marketing expenses and retail placement fees, during its overseas expansion are a burden,” said Jeong Dong-hee, an analyst at Samsung Securities. He added, “Consistently achieving an operating margin in the high 30% range is important for a revaluation of the company.”

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