Hyundai Motor Securities on the 17th said skin-regenerating skin boosters are only at the early stage of demand in the global market and that PharmaResearch's Rejuran is the only one. It initiated coverage with a "Buy" rating and a target price of 430,000 won. PharmaResearch's previous-day closing price was 308,000 won.
Kim Hyun-seok, an analyst at Hyundai Motor Securities, said, "PharmaResearch's share price has fallen more than 50% from its peak, and its 12-month forward price-earnings ratio (PER) has also dropped from 37 times at the peak to around 16 times."
She added that in the global market, skin-regenerating skin boosters are at an early stage and, given that PharmaResearch's Rejuran is the only one, the current multiple level appears undervalued.
There are concerns that market share could fall in the domestic market, but growth from rising medical tourism is also expected to continue.
Kim said, "Concerns are spreading about a weakening of market dominance as domestic competitors roll out extracellular matrix (ECM) skin booster products and aggressively expand production capacity (CAPA)."
However, domestic inbound medical tourism expenditure continues to hit record highs. Kim said, "In particular, this year, inflows of Chinese and Japanese tourists to Korea are expected to rise sharply due to China-Japan tensions, and Rejuran, which is highly recognized in China and Japan, is expected to benefit."
In addition, expansion into the European market looks possible this year. Kim said, "This year will be the first year that European-bound Rejuran supply volumes are fully reflected, and considering the annual minimum order quantity (MOQ), Europe-bound sales are around 12 billion won," adding, "However, we view this as a minimum level given that overseas skin-regeneration skin boosters are at an early stage, and there is potential for sales expansion."