DAOL Investment & Securities analyzed on the 28th that Daewoong achieved strong performance in the first quarter of this year based on solid results from Daewoong Pharmaceutical and Daewoong Bio. It noted that significant improvements in production capacity are expected as the main subsidiaries' production bases are completed after next year. The target stock price is 28,000 won, and it maintains its investment opinion as "buy."
Daewoong is expected to expand its main research and development (R&D) and production facilities by mid-next year. The Magok R&D Center is being developed with the goal of completion in July next year, and the third Nabota factory is also scheduled for completion in June next year. Through Daewoong Bio, a cephalosporin antibiotic factory is expected to be built in June next year.
Daewoong Bio's biologics factory is aiming to receive GMP certification from the U.S. Food and Drug Administration (FDA) in 2028. The local subsidiary in Indonesia, Celatox Biopharma, plans to hire personnel and is expected to capture the beauty and medical demand in the Southeast Asia region.
Researcher Park Jong-hyun from DAOL Investment & Securities noted, "In the short term, profitability may decrease due to depreciation costs from the expansion of production facilities. However, once operational, it is possible to reduce net borrowings in the short term based on increased profits."
The patient burden rate for colin alfoscerate, used as a cognitive enhancer, is expected to increase, but strong growth is anticipated as there are no substitutes. The Ministry of Health and Welfare is pushing for a plan to raise the burden rate for colin alfoscerate to a maximum of 80% in 2020, while Daewoong Pharmaceutical and Chong Kun Dang are both pursuing lawsuits. Recently, Chong Kun Dang's final ruling against them was issued, which is expected to impact Daewoong Pharmaceutical's lawsuit.
Researcher Park explained, "If the utility is not proven through the clinical reevaluation last October, a lawsuit regarding the refund clause is also underway," adding, "It is necessary to monitor the outcome of that lawsuit as well."