Medytox founder and CEO Jung Hyun-ho
Medytox Inc., South Korea’s top producer of botulinum toxin for medical uses, is in the market spotlight for a fast rise in its stock prices this year. The company’s stock price climbed nearly 62 percent from the start of this year as of Wednesday, largely driven by upbeat outlook for its business in China.
The company announced on Wednesday it completed a registration-enabling phase III study of its key product in China, allowing it to become the first Korean company in China’s botox market next year.
According to local industry statistics, China’s cosmetics market value is expected to expand from 14.5 trillion won ($12.7 billion) to 44 trillion won in 2020, the largest scale in the world, and more than six times larger than that of Korea.
Medytox founder and CEO Jung Hyun-ho said sales from business in China will be realized from 2019. The company’s new plant that began production in Korea early this month is another factor to raise expectations about its future earnings. At full capacity, the company’s domestic sales can increase more than 10 times to 600 billion won from current level.
Market analysts forecast the company’s revenue to have reached 43.2 billion won in the second quarter with an operating profit of 24.2 billion won, but optimists say it could be well above market expectations given the favorable factors.
“The current consensus is based on business activities way before the operation of Medytox’ third plant and actual top-line and bottom-line figures would be larger than expected,” said Sun Min-jung, senior researcher at Samsung Securities, predicting “the early operation of the plant could bring 5 percent more outcomes to the company.”
Brokerage houses are responding with higher target prices for the company. Shinhan Investment upgraded its target price from 600,000 won to 650,000 won in its July 11 report, saying Medytox Q2 performance has beaten estimates by a wide margin.
Shares of Meytox ended Thursday 1 percent up at 562,900 won.
By Yoo Tae-yang
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