Date : 18-10-05 15:48
GMP(018290.KS) - NEWS from the Korean Economic Daily, FINANCIAL NEWS
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   E180824_GMP.pdf (344.4K) [174] DATE : 2018-10-05 15:48:05
HYUNDAI MOTOR SECURITIES expects increase of turnover of GMP
BTS provides wind beneath CICA’s wings
1) Investment highlights
- We initiate our coverage of GMP with a BUY and a target price of KRW 13,000.
- VT Cosmetics’ sales of the CICA line in China are growing sharply, and the start of a collaborative
project with a popular Korean boy band, BTS, is scheduled to begin in September.
- GMP Bio is conducting pre-clinical phase trials for an Alzheimer’s disease medicine utilizing
regulatory T cells.
- GMP’s parent earnings turned to profit in 2Q18 and will likely remain profitable for the full year,
helped by the launch of a fully automated laminator.

2) Major issues and earnings outlook
- A new line of beauty products named CICA using centella asiatica extract (13 items including facial
masks, skin foundation pact, sun protection sprays, etc.) have enjoyed sharp sales increases overseas
since April. Chinese sales have been especially robust, with an exclusive Chinese vendor attached to
the distribution of CICA products in the Greater China region. In September, the product lineup is
expected to diversify further as the new BTS beauty project will be introduced in the Americas and
Europe through a partnership with CAA, the biggest entertainment/sports agency in the US.
- Another beauty project with BT21 characters based on BTS members will be launched in Japan in
September through a partnership with LINE. The expected expansion into the Southeast Asian
market in the future should spur earnings higher.
- GB301, a drug candidate for Alzheimer’s disease using regulatory T cells, is undergoing pre-clinical
trials. It is preparing to enter phase 1 and 2a trials in both Korea and Australia, which will likely take
1.5 years. The firm aims to out-license the drug eventually.
- The laminating business is expected to turn profitable on growing sales of Securegram and
Hiddengram as well as the recognition of sales from a fully automated paper laminator, an upgraded
version of the manually operated laminating system.
- Business fully normalized in 2Q18, with sales growing 70.7% YoY to KRW26.2bn and operating profit
of KRW3.2bn.

3) Share price outlook and valuation
- The stock has been rallying thanks to robust earnings growth led by the CICA line since May. With the
launch of the BTS beauty project (VTxBTS, BT21) in mid-September, soon after the BTS comeback on
Aug 24, GMP should become a major BTS beneficiary. Among listed companies, we believe GMP is the
one that sets to benefit most materially from the growing international popularity of BTS.
- For our target price, we applied 25.1x target P/E to 12-month-forward EPS of KRW518.