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Chong Kun Dang’s net profit rises 100% on-year in Q2

Chong Kun Dang headquarters in Chungjeongno, Seoul
Chong Kun Dang headquarters in Chungjeongno, Seoul
Chong Kun Dang’s second quarter net profit rose 100 percent on-year due to decreased spending on marketing amid COVID-19 social distancing, and solid sales of its chronic illness treatments.

Hi Investment & Securities said Monday it is upward-adjusting prospects for Chong Kun Dang by 26.9 percent from previous 130,000 won ($109) to 165,000 won. Shinyoung Securities set the prospect slightly higher at 170,000 won and reinforced the opinion to buy.

Chong Kun Dang’s performance was a surprise in times of COVID-19 uncertainties. In its second quarter report, the company posted a 17.6 percent increase in revenue at 313 billion won ($262 million) and a 90.9 percent increase in operating profit at 36 billion won. Net profit rose 100 percent to 25 billion won.

Analyst opinions credited Chong Kun Dang’s earnings surprise on its chronic illness-centered product portfolio, including drugs for diabetes and high cholesterol.

Chong Kun Dang could have more good news in the near future as a number of its drug pipelines are undergoing global clinical trials. Its autoimmune disease treatment CKD-506 has completed a clinical phase 2a trial in Europe, targeting rheumatoid arthritis patients, and is waiting for the results to be announced.

CKD-506 is anticipated to undergo clinical phase 2b trial in Europe in the later half of 2020, as well as a clinical phase 2a trial for inflammatory bowel disease indication.

Chong Kun Dang is also carrying out phase 1 clinical trial of Charcot Marie Tooth disease treatment pipeline CKD-510 in Europe; phase 1 clinical trial of bispecific antibody pipeline CKD-702 in Korea; and phase 1 clinical trial of Huntington’s disease treatment pipeline CKD-504 in Korea and in the US.

Charcot Marie Tooth disease, or CMT, is a genetic disorder known to plague Korean chaebol families of Samsung and CJ.

By Lim Jeong-yeo (kaylalim@heraldcorp.com)
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