Korea Investment & Securities reported on August 4 that GC Green Cross experienced disappointing second-quarter results due to the deferral of revenue recognition for key products to the second half of the year. The firm maintained a 'buy' rating but lowered its target price by 16% to 160,000 won.
Analysts Woo Hae-joo and Lee Da-young noted, "The consolidated revenue for the second quarter was 421.2 billion won, with an operating profit of 1.7 billion won, falling short of market expectations." They attributed this shortfall largely to the delayed revenue recognition for major products.
In the blood products sector, some shipments' revenue recognition was pushed to the third quarter, leading to a decline in sales. The vaccine segment also faced challenges, as the production schedule for the flu vaccine was delayed, limiting the seasonal sales increase. Additionally, the immunoglobulin product Aliglo saw some revenue from global partner countries deferred to the fourth quarter, negatively impacting profitability.
However, Korea Investment & Securities anticipates a significant improvement in performance starting in the second half of the year. They project annual revenue of 2.0054 trillion won and an operating profit of 70.5 billion won for the year.
In particular, the third quarter is expected to reflect the deferred sales of the flu vaccine and Aliglo, along with the recognition of some advance payments from Eli Lilly's sale of its Curevo stake. The fourth quarter is projected to benefit from the global export expansion of Hunterase and the achievement of record quarterly sales for Aliglo.
The analysts stated, "As the development of subcutaneous immunoglobulin (SCIG) formulations and investments in production facilities gain momentum, the long-term growth drivers will also strengthen," adding that the company's defensive characteristics as a pharmaceutical stock will become more pronounced compared to short-term performance volatility.
* This article has been translated by AI.
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