Domestic beauty and medical corporations are expected to post record results this year. With the strong dollar invigorating foreign tourism and rising interest in K-beauty, more visitors are going to dermatology clinics. Some corporations plan to defend domestic demand while building direct sales systems overseas to expand market share.
◇K-dermatology becomes a must-stop course for foreign tourists?
On the 22nd, according to FnGuide, PharmaResearch(214450) is expected to record 662.6 billion won in consolidation revenue and 265.5 billion won in operating profit this year. Both revenue and operating profit are up 24% from last year. Hugel(145020) is also forecast to post 522 billion won in consolidation revenue and 217 billion won in operating profit this year. Those figures are up 23% and 8%, respectively, from last year.
CLASSYS(214150) is projected to log 467.5 billion won in consolidation revenue and 219.1 billion won in operating profit this year. Revenue is up 39% and operating profit 28% from last year. L&C BIO(290650) is expected to see this year's consolidation revenue reach 160.5 billion won, up 88% from last year. Operating profit is forecast at 34.9 billion won, up 691%.
One of the factors supporting these corporations' results is foreign patients. With Netflix animation K-Pop Demon Hunters and others gaining popularity abroad, interest in Korea has risen, and at the same time K-medical tourism is drawing attention, boosting demand, analysts said.
According to the Ministry of Health and Welfare, more than 2 million foreign patients visited Korea last year. Some say this year's weak won is also helping attract foreign patients. A PharmaResearch official said, "Exchange-rate movements differ by country, but with the strong dollar, foreigners who undergo procedures in Korea can maintain price competitiveness."
◇Expanding market share through local direct sales
Corporations are building direct sales systems overseas as well as at home. Hugel recently began direct sales of its Botox (botulinum toxin) Letibo in the United States. Previously it supplied products through local distributors, but now it will run direct sales in parallel. Through this, it plans to lift U.S. market share to 5% by the end of this year and 10% by 2028. A Hugel official said, "A direct sales system can positively affect profitability."
CLASSYS's flagship product is Shurink, which fires ultrasound to improve skin elasticity. CLASSYS also acquired Brazilian distributor MedSystems in March, establishing a directly managed system. CLASSYS plans to build a direct sales system in Latin America and manage everything from product supply to marketing itself.
PharmaResearch is known for Rejuran, which injects biocompatible material extracted from salmon DNA into the skin's dermis. Rejuran has entered 50 countries, including Canada, but has yet to clear the U.S. Food and Drug Administration (FDA).
The company is picking up speed overseas with cosmetics made using Rejuran technology. Recently, it also acquired U.S. cosmetics manufacturer GC USA. A PharmaResearch official said, "In the past we made cosmetics in Korea and supplied them, but going forward we will produce volumes directly in North America and ship from there."
L&C BIO is making inroads into domestic hospitals with its skin booster Re2O. As of the first quarter this year, it plans to increase Re2O production from 35,000 units per month to 150,000 units in the third quarter. However, Re2O still derives more than 90% of its revenue from the domestic market, leaving the task of delivering results overseas. The company aims to enter 20 countries this year, including Hong Kong.