Global investment bank Morgan Stanley has suddenly emerged as the No. 2 shareholder of KOSDAQ-listed PharmaResearch, known for the skin booster "Rejuran," drawing attention. It is being seen as bargain hunting as it bought PharmaResearch equity after the stock fell over the past four months.
On the other hand, as the market's view of PharmaResearch has been weak recently, with securities firms lowering their targets one after another, suspicions are being raised that Morgan Stanley strategically disclosed its equity before selling its holdings.
Morgan Stanley & Co. International plc, an asset management affiliate of Morgan Stanley, newly disclosed after the close on the 16th that it holds 5.31% (551,265 shares) of PharmaResearch equity. The purpose of the holding is simple investment. Following this disclosure, Morgan Stanley became the No. 2 shareholder after Chair Jeong Sang-su, the largest shareholder (including related parties, 31.39%).
Typically, a new equity disclosure by a foreign institution is read as a signal of long-term investment and viewed positively. PharmaResearch's share price climbed to 711,000 won on Aug. 26, a record high, then plunged 47% to 377,600 won the previous day, returning to its April level this year. A year-over-year decline in third-quarter sales and intensifying competition in the skin booster market hurt investor sentiment.
With this equity disclosure in such a situation, expectations grew that Morgan Stanley had been bargain hunting and that the share price could hit bottom and rebound.
Securities firms have been cutting PharmaResearch's target price. From last month through the 16th, eight firms including Mirae Asset Securities and Samsung Securities lowered their targets. Yuanta Securities Korea made the biggest cut, from 890,000 won to 647,000 won (down 27.3%). Reasons cited include the start of operations at the newly expanded botulinum toxin plant being delayed from the second quarter of next year to the second quarter of 2027, and the launch of the microneedle radio frequency (RF) device being pushed back from the end of this year to the second quarter of next year.
In fact, fourth-quarter estimates based on the consensus (the securities industry's average forecast) decreased slightly to 547.6 billion won in revenue and 227.3 billion won in operating profit, from a month ago (549.4 billion won in revenue and 228.1 billion won in operating profit).
Morgan Stanley held 500,000 shares through the 9th of this month and disclosed that it bought about 50,000 additional shares from the 10th to the 15th. The average purchase price was about 385,305 won. Some also say Morgan Stanley made a strategic equity disclosure and will seek to take profits if the share price rebounds.
Experts said they lowered PharmaResearch's target price to reflect concerns about a slowdown in growth, but assessed that its medium- to long-term growth potential remains intact.
Kim Chung-hyeon, an analyst at Mirae Asset Securities, said, "Given the base effect from strong results this year, the recent share price decline is shedding the previous valuation burden," and added, "In the fourth quarter, the visa-free tourism effect for Chinese visitors to Korea is expected, and initial shipments to French aesthetics company Vivacy are also positive for earnings."
Park Jong-hyeon, an analyst at DAOL Investment & Securities, said, "Rejuran was officially launched in the United Kingdom this month, and a U.K. shipment is scheduled," and noted, "Data that will dispel concerns about domestic demand and overseas markets will be addressed sequentially through medical tourism consumption data and next year's Korea Customs Service export data."