April 27, 2024

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[THE INVESTOR] Dong-A ST’s growth might be curbed by slowing exports, said NH Investment and Securities on April 3, downgrading the recommendation to a “hold” from a “buy” and lowering the target price to 120,000 won (US$113.39) from 130,000 won.

Exports of its flagship energy drink Bacchus have grown at an average of 32 percent from 2012 to 2016 but fell to only 3.3 percent last year. It might face a wall since it does not have a new market to tap into, said analyst Koo Wan-seong.

The pharmaceutical company also has neither a generic that could contribute to short-term earnings nor an incrementally modified drug in its pipeline, pointed out the analyst. 

Its earnings in the first quarter, however, will improve on a standalone basis, with 141.9 billion won in revenue and 7.7 billion won operating profit, from introducing new ethical drugs and low baseline effect, he added.

By Hwang You-mee (glamazon@heraldcorp.com)