Kiwoom Securities on the 19th positively assessed that HUGEL is running its most important U.S. business after establishing a direct sales organization. The firm raised its target price to 400,000 won from 390,000 won and maintained a Buy rating. HUGEL's closing price in the previous session was 242,000 won.
On the 15th (local time), HUGEL took part in the J.P. Morgan Healthcare Conference and gave a presentation in the Asia-Pacific track. The company set a long-term goal of 900 billion won in revenue in 2028 and a 50% EBITDA margin, signaling confidence in its financial performance. In particular, it projected that the share of U.S. sales would increase by 22.2 percentage points from last year's estimate of 7.8%.
HUGEL's main growth strategies are fourfold: U.S. expansion, maintaining the No. 1 position in the Korea market, increasing international market share, and diversifying the portfolio.
For the U.S. business, the company is currently working with BENEV, a local distributor of medical devices and pharmaceuticals. In the botulinum toxin value chain that moves from manufacturing at the Gangneung plant through HUGEL America's local subsidiary, BENEV, and medical professionals, a direct sales organization will be established within the local subsidiary. The direct sales organization is expected to begin full-fledged activities at the end of this year.
Shin Min-su, an analyst at Kiwoom Securities, said, "Because the price at which HUGEL's domestically manufactured products are sold to medical professionals is reflected in the consolidation financial statements, it could help generate a higher profit margin."
Shin said, "Direct sales in the U.S. is a high mountain that domestic medical device firms have struggled with," adding, "Sales staff command high salaries, and aggressive sales are needed, which means labor and marketing costs can be substantial, creating a risk of margin deterioration."
He continued, "Both the No. 1 and No. 2 toxin companies in the U.S. are seeing slower sales growth than before, and the market environment is weak," adding, "To turn crisis into opportunity, you must be ready to risk everything. If you are determined to die, you will live."