1. What Happened? : Daehwa Pharmaceutical’s H1 2025 Performance Decline
Daehwa Pharmaceutical reported weak earnings for H1 2025, with revenue of KRW 35.9 billion (a 50.5% decrease YoY), operating profit of KRW 200 million, and a net loss of KRW 500 million. Both the pharmaceutical and cosmetics/medical device segments experienced significant sales declines, impacting overall profitability.
2. Why Did This Happen? : Analyzing the Causes of the Downturn
The decline in sales across business segments is attributed to weak sales of key products and increased market competition. The shift to losses in the cosmetics/medical device segment had a particularly negative impact on the overall results. The continuing downward trend in revenue and operating profit since Q4 2024, coupled with a challenging market environment, raises further concerns. Macroeconomic factors like fluctuations in the KRW/USD and KRW/EUR exchange rates, and the potential for future interest rate hikes, could also affect performance.
3. What’s Next? : Future Outlook and Growth Potential
In the short term, the weak performance is likely to dampen investor sentiment and put downward pressure on the stock price. However, in the medium to long term, the approval and launch of Liporaxel in China and the expansion of its indications could serve as growth drivers. However, challenges remain, including the successful development of new drugs, diversification of the business portfolio, and strengthening the company’s financial position.
4. What Should Investors Do? : Investment Strategies and Action Plan
A conservative approach is recommended at this time. Investors should closely monitor future earnings releases, progress in new drug development, and management’s efforts to normalize the business before making investment decisions. The successful market penetration of Liporaxel and the securing of additional growth drivers will be key factors in investment considerations.
Q: How did Daehwa Pharmaceutical perform in H1 2025?
A: The company reported KRW 35.9 billion in revenue, KRW 200 million in operating profit, and a net loss of KRW 500 million, marking a decline in sales and a shift to losses compared to the same period last year.
Q: What are the main reasons for the poor performance?
A: Declining sales across business segments and a shift to losses in the cosmetics/medical device segment are the primary factors.
Q: What is the outlook for Daehwa Pharmaceutical?
A: The approval and launch of Liporaxel in China and expansion of its indications could drive future growth, but short-term improvement is expected to be challenging.
Q: How should investors react?
A: A conservative approach is recommended. Closely monitor future earnings releases and new drug development progress before making any investment decisions.