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Bio pharm equities lose past glory on KOSDAQ

Bio pharm equities lose past glory on KOSDAQ

Kim Jan-di

2014.06.13 11:24:25

South Korea’s bio-pharmaceutical stocks are not faring well unlike they did in the past. Most of the KOSDAQ’s bio-pharm equities that were among top-ranked stocks by market cap three years ago are no longer placed where they used to be. 
Celltrion is the sole bio-pharm stock that belongs to the KOSDAQ’s top 10 market cap stocks as of Friday. Companies in the bio-pharmaceutical sector, whose market cap once far exceeded one trillion won ($981.5 million), sharply slid from top ranks due to the combination of several factors such as demanding price to earnings ratios (PERs) and concerns over weaker-than-expected earnings.
Madipost once saw its market cap surge to the top five on the back of the craze for stem-cell related shares in late 2011, but its market cap fell to the 44th place. Gemvax and Seegene, which had made it to the top 10, fell to the 27th and 13th ranks respectively. With market cap surpassing one trillion won, these three companies used to be mentioned as flagship shares in the pharmaceutical and bioscience sector.
But they lost their reputation long ago because of poor earnings.
Medipost and Gemvax posted losses in the first quarter of this year, and Seegene’s weaker-than-expected earnings added to the disappointment.
Seegene’s consolidated operating profit jumped 15.2 percent year-on-year (yoy), but its separate earnings fell sharply short of the market expectation.

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About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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