SK Securities analyzed that KPS built a solid business structure focused on the pharmaceutical and bio business in five years. They presented a target stock price of 13,000 won and an investment recommendation of "buy." The closing price of KPS on the previous trading day was 8,800 won.
KPS is a manufacturer of organic light-emitting diode (OLED) display equipment that was acquired by representatives Kim Seong-cheol and Kim Ha-yong in 2020 to engage in the pharmaceutical and bio business. The transformation into a pharmaceutical and bio company was completed starting from the first quarter of this year.
SK Securities projected that KPS's consolidated sales and operating profit this year would surge by 79.1% and 205.1% year-on-year to 228.5 billion won and 19 billion won, respectively. Heo Seon-jae of SK Securities Research Institute noted, "KPS's current stock price is somewhat undervalued, at about nine times the price-to-earnings ratio based on this year's expected performance."
SK Securities pointed out that KPS secured cash flow through revenue-generating businesses such as Battery Solutions acquired in 2023 and Korea Global Pharmaceutical acquired last year. Currently, KPS is preparing to register as a recycling partner for BYD's lithium iron phosphate (LFP) batteries, expecting to sign a cooperation contract in the second quarter of this year.
Heo noted, "Focusing on the main bio business, KB BioMed and Algok Bio, will also provide mid- to long-term growth momentum."