Mirae Asset Securities logo

1Q26 review and 2026 outlook

For 1Q26, Daewoong Pharmaceutical reported non-consolidated preliminary revenue of W335.7bn (+6% YoY; in line with the consensus), operating profit of W27.4bn (-35% YoY; 24% below the consensus), and an OP margin of 8.2% (-5.1%p YoY). The operating profit miss was driven by increases in COGS and SG&A expenses, reflecting inventory returns and commission settlement costs associated with ETC channel streamlining (e.g., shift to a regional wholesale hub model). Channel optimization efforts also contributed to a 1% decline in ETC revenue (to W216.1bn); we expect these pressures to persist in 2Q26. Fexuclue (GERD) revenue fell 29% YoY to W19.2bn, though prescription value totaled W26.5bn (suggesting underlying demand remained solid relative to reported revenue). Meanwhile, Nabota revenue grew 14% YoY to W51.9bn, with exports (+14% YoY to W42.4bn) continuing robust growth. Digital healthcare revenue came in at W17bn (+52% YoY). Of this, we estimate ThynC contributed roughly W5bn, with penetration reaching 2.8% (around 20,000 beds).

For 2026, we forecast revenue at W1.48tr (+7% YoY) and operating profit at W194.3bn (-5% YoY), which are 1% and 14% below our previous estimates, respectively. The impact of channel streamlining efforts should gradually fade from 2H26 onward. Regarding ThynC, we had previously assumed a six-month time lag between deployment and revenue recognition, but meaningful revenue generation appears to be taking three to six months longer than expected. Accordingly, we now expect ThynC revenue to increase in earnest in 2027.