Avg Daily Trading Value (60-day): KRW20.1b / USD17.6m
One-Year Performance
Metric
1M
6M
12M
Medytox (%)
8.1
58.7
30.5
Vs Kosdaq (%pts)
4.4
46.1
26.4
Key Changes
Metric
New
Old
Diff
Recommendation
BUY
BUY
-
Target Price
660,000
600,000
10.0%
2017E EPS
14,174
14,083
0.6%
2018E EPS
18,095
17,848
1.4%
Samsung vs. The Street
Metric
No of Estimates
Target Price
Recommendation
9
600,000
3.9
Buy Rating
BUY★★★: 5
BUY: 4
HOLD: 3
SELL: 2
SELL★★★: 1
2Q Performance Expectations
Consolidated Sales: KRW44b (+39.7% y-y)
Operating Profit: KRW23.7b (+25.9% y-y)
Net Profit: KRW19.3b (+20.8% y-y)
Operating Margin: 53.9% (-5.9% y-y, +1.6% q-q)
SG&A Costs: KRW12.4b (+62.8% y-y)
R&D and Ad Spending: Increased, impacting margins
Export Growth
Botulinum Toxins (BTX): KRW21.9b (+48% y-y)
Fillers: KRW19b (+35.1% y-y)
Upfront Fees: KRW2.4b
Other: KRW0.8b
Toxin Exports: KRW15.4b (+82.6% y-y)
Filler Exports: KRW6.5b (+2.4% y-y)
Domestic Sales: KRW14.2b (+26.1% y-y)
Domestic Fillers: KRW4.8b (+71.7% y-y)
R&D Momentum
Innotox: Expected to enter Phase III trials in 2H, likely to trigger a development milestone
Neuronox (China): Finalized Phase III trials in June, expected approval in 2019
Neuronox (US & Europe): Out-licensing planned for 2018, with potential to impact markets
Coretox: Out-licensing to a global pharmaceutical firm
Summary Financial Data
Metric
2016
2017E
2018E
2019E
Revenue (KRWb)
133
184
230
274
Net Profit (adj) (KRWb)
59
80
102
124
EPS (adj) (KRW)
10,471
14,174
18,095
21,900
EPS Growth (% y-y)
40.0
35.4
27.7
21.0
EBITDA Margin (%)
60.0
57.9
58.6
58.8
ROE (%)
45.4
43.9
38.9
33.9
P/E (adj) (x)
34.1
38.6
30.3
25.0
P/B (x)
12.8
13.3
9.4
6.9
EV/EBITDA (x)
26.0
29.4
22.5
18.1
Dividend Yield (%)
0.4
0.4
0.4
0.4
Valuation
Operating Value: KRW2.29t (up from KRW2.04t)
New Drug Value: KRW1.45t
Innotox: KRW1.04t
Neuronox (China): KRW308.3b
Coretox: KRW76.1b
Neuronox (US & Europe): KRW29.6b
Fair Value: KRW3.75t
Fair Value per Share: KRW662,626
Upside from Current Price: 18.3%
Target Multiple: 27.3x 2017 P/E (30% premium to 21x average for Asian dermal filler firms)
DCF Valuation
Enterprise Value: KRW27,271b
Cash & Cash Equivalents: KRW16b
Short-Term Investments: KRW15b
Interest-Bearing Debt: KRW102b
Equity Value: KRW2,332b
Fair Value per Share: KRW412,304
Innotox: Value
Fair Value: KRW1,039.5b
Fair Value per Share: KRW183,764
Assumptions:
Market share peaks at 10% five years after launch
80% EBIT margin, 20% tax rate, 8.7% WACC
Phase III success rate of 49.8%
Neuronox: Value in China
Fair Value: KRW308.3b
Fair Value per Share: KRW54,510
Assumptions:
Market share peaks at 10% five years from launch
55% EBIT margin, 20% tax rate, 8.7% WACC
Approval-stage success rate of 83%
Coretox: Value
Fair Value: KRW76.1b
Fair Value per Share: KRW13.3b
Assumptions:
Market share increases from 1% to 3%
55% EBIT margin, 20% tax rate, 8.7% WACC
Key Takeaways
Medytox is expected to post strong results in 2Q, driven by robust toxin exports.
The third plant's launch in 3Q will alleviate production constraints and boost earnings in 2H.
R&D momentum is strong, with Innotox entering Phase III trials and Neuronox expected to be approved in China by 2019.
The company's fair value is estimated at KRW3.75t, with a target price of KRW660,000, reflecting a sector re-rating.
Net profit is projected to grow at 27.9% CAGR over 2017–2019.
The stock is currently trading at 26.8x 2017 P/E, suggesting potential upside.
The valuation includes both operating and new drug value, with Innotox, Neuronox (China), Coretox, and Neuronox (US & Europe) contributing significantly.
