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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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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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