[Alpha Biz= Ellie Kim] Kiwoom Securities lowered its target price for Dong-A ST to 60,000 won from 76,000 won, citing slowing growth in key segments, while maintaining a ‘Buy’ rating on expectations of improved profitability.

Analyst Heo Hye-min noted that growth of the company’s growth hormone therapy “Growtropin” is expected to moderate due to economic slowdown and already high market penetration. The market share gap with competitors has narrowed to within single digits, limiting further upside.

Exports of “Bacchus,” a key product, may also face headwinds in certain regions due to geopolitical risks.

Kiwoom Securities expects Dong-A ST’s standalone first-quarter revenue to rise 10% year-on-year to 186.3 billion won, slightly missing market expectations. However, operating profit is projected to increase 45% to 10.2 billion won, exceeding consensus.

By segment, the prescription drug (ETC) business is forecast to grow about 20% year-on-year, while the digital healthcare division is expected to post solid growth, supported by arrhythmia diagnosis and ECG monitoring solutions contributing roughly 1.5 billion won in quarterly revenue.

Despite the lower target price, the brokerage highlighted improving profitability driven by reduced seasonal costs and a restructuring of R&D efforts.

Dong-A ST has been reorganizing its pipeline since late last year, with a focus on first-in-class drug candidates targeting autoimmune and neuroinflammatory diseases. It is also developing an oral GPR119 agonist for MASH and type 2 diabetes, which has demonstrated efficacy and safety in global Phase 2a trials, with potential expansion into obesity treatment.

 

 

 

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