Alphabiz - Concerns Grow Over Possible Overvaluation of Myungin Pharm After Sharp Post-IPO Surge

[Alpha Biz= Kim Jisun] Seoul, October 9 — South Korea’s newly listed Myungin Pharmaceutical (Myungin Pharm) has seen its stock price nearly double since its October 1 debut, prompting growing concerns that the company may be overvalued compared with larger peers in the domestic pharmaceutical industry.


According to the Korea Exchange, Myungin Pharm closed at ₩115,800 on October 2, up 99.7% from its IPO price of ₩58,000. Its market capitalization stood at ₩1.69 trillion, compared with ₩1.13 trillion for Chong Kun Dang — despite the latter’s six times higher annual sales (₩1.59 trillion) and stronger R&D pipeline.


The valuation gap is even wider when compared with JW Pharmaceutical, whose operating and net profits are similar to Myungin’s. Myungin’s market cap is 3.4 times larger than JW’s ₩494.8 billion valuation.


Myungin mainly focuses on generic drugs, with limited new drug achievements. Its most advanced R&D project is the Phase 3 clinical trial of “Evenamide,” an antipsychotic licensed from Italy’s Newron Pharmaceuticals for domestic rights only — limiting its potential market.


By contrast, Chong Kun Dang has exported its HDAC6 inhibitor CKD-510 to Novartis and is conducting U.S. trials for CKD-703, an antibody-drug conjugate (ADC) cancer therapy. Meanwhile, HK Inno.N, which markets its own reflux treatment “K-CAB” and is preparing for U.S. entry, has a market cap of ₩1.30 trillion, still below Myungin’s.


A Kiwoom Securities report issued last month estimated Myungin’s fair market capitalization between ₩657 billion and ₩847 billion — roughly half of its current valuation, suggesting the stock may be overheated following its debut rally.

Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)