Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

Dongkook Pharmaceutical Co., Ltd. produces pharmaceutical products. The Company's products include gum treatment drugs, antibiotics, and injections. Dongkook Pharmaceutical also produces raw material medicines.

<ul>
<li>There are three key investment highlights of Dongkook Pharmaceutical. First, the company has successfully expanded its cosmetics/health care business. Healthcare/cosmetics accounted for nearly 40% of total sales in 1H 2026. </li>
<li>Second, the company has highly consistent growth in sales and profits backed by solid sales of its core pharmaceutical/cosmetics brands including Madecassol, Insadol, Centellian24, and Madeca Cream.</li>
<li>Third, it has cheap valuations. It is trading at P/E of 10.5x and P/B of 1.2x based on 2027 consensus earnings estimates.</li>
</ul>


There are three key investment highlights of Dongkook Pharmaceutical. First, the company has successfully expanded its cosmetics/health care business. Healthcare/cosmetics accounted for nearly 40% of total sales in 1H 2026. 
Second, the company has highly consistent growth in sales and profits backed by solid sales of its core pharmaceutical/cosmetics brands including Madecassol, Insadol, Centellian24, and Madeca Cream.
Third, it has cheap valuations. It is trading at P/E of 10.5x and P/B of 1.2x based on 2027 consensus earnings estimates.


Korea Small Cap Gem #73: Dongkook Pharmaceutical

<ul>
<li>On 7 October, it was reported that SAMG Entertainment will supply its Catch! Teenieping products to about 2,000 Target stores in the United States.</li>
<li>In my view, this deal with Target could add additional 11 billion won+ sales in 2026 and 28 billion won+ in 2027 for SAMG Entertainment.</li>
<li>So this deal with Target could result in additional 6.7% and 15.9% sales for SAMG Entertainment, respectively in 2026 and 2027. </li>
</ul>


On 7 October, it was reported that SAMG Entertainment will supply its Catch! Teenieping products to about 2,000 Target stores in the United States.
In my view, this deal with Target could add additional 11 billion won+ sales in 2026 and 28 billion won+ in 2027 for SAMG Entertainment.
So this deal with Target could result in additional 6.7% and 15.9% sales for SAMG Entertainment, respectively in 2026 and 2027. 


Korea Small Cap Gem #72: SAMG Entertainment

Won Tech Co., Ltd. operates as a medical laser equipment and ultrasound company. The Company produces, researches, and develops skin aesthetics equipment, fat reduction equipment, surgical usage equipment, skin care equipment, home care equipment, laser and ultra sound products. Won Tech markets its products worldwide.

<ul>
<li>Won Tech's exports increased by 59.8% YoY in 2025 and by 21.5% YoY in 1H 2026. The company's export sales to the U.S. increased sharply in 1H 2026. </li>
<li>Won Tech is currently trading at P/E of 9.8x and P/B of 2.2x based on 2026 consensus earnings estimates (50% to 60% discount to its historical valuation multiples). </li>
<li>Won Tech provides medical aesthetics and surgical devices. The company's products specializes in the laser and energy based medical solutions used for skin rejuvenation and face lifting procedures. </li>
</ul>


Won Tech's exports increased by 59.8% YoY in 2025 and by 21.5% YoY in 1H 2026. The company's export sales to the U.S. increased sharply in 1H 2026. 
Won Tech is currently trading at P/E of 9.8x and P/B of 2.2x based on 2026 consensus earnings estimates (50% to 60% discount to its historical valuation multiples). 
Won Tech provides medical aesthetics and surgical devices. The company's products specializes in the laser and energy based medical solutions used for skin rejuvenation and face lifting procedures. 


NFC Corporation manufactures and sells cosmetics. The Company produces ceramide moisturizer, sun screen, emulsifier, and other products. NFC conducts business in Korea, China, Japan, and other countries.

<ul>
<li>NFC (265740 KS) is a Korean cosmetics company which has rapidly increased its ODM business sales in the past two years. </li>
<li>NFC's customers include Equalberry, Cellimax, Dr. Althea and Beauty of Joseon, brands whose products are increasingly visible outside Korea.</li>
<li>Based on consensus net profit estimate of 18.5 billion won (2027E) and a 12x P/E, this would result in a market cap of 222 billion won (91% higher than now). </li>
</ul>


NFC (265740 KS) is a Korean cosmetics company which has rapidly increased its ODM business sales in the past two years. 
NFC's customers include Equalberry, Cellimax, Dr. Althea and Beauty of Joseon, brands whose products are increasingly visible outside Korea.
Based on consensus net profit estimate of 18.5 billion won (2027E) and a 12x P/E, this would result in a market cap of 222 billion won (91% higher than now). 


Cross Asset Strategy

<ul>
<li>In this insight, I provide the data analysis regarding the relative performance of my Korea Small Cap Gem series insights (for 27 KOSDAQ listed companies) versus KOSDAQ last two years.</li>
<li>These 27 companies' share prices are up on average 3.9%, 11.5%, and 13.8% over one week, one month, and three months, respectively from one day prior to their insight publications.</li>
<li>I compared these performances versus KOSDAQ which was up on average 0.1%, 1.2%, and 3.4%, respectively from one day prior to these insight publications (same time periods). </li>
</ul>


In this insight, I provide the data analysis regarding the relative performance of my Korea Small Cap Gem series insights (for 27 KOSDAQ listed companies) versus KOSDAQ last two years.
These 27 companies' share prices are up on average 3.9%, 11.5%, and 13.8% over one week, one month, and three months, respectively from one day prior to their insight publications.
I compared these performances versus KOSDAQ which was up on average 0.1%, 1.2%, and 3.4%, respectively from one day prior to these insight publications (same time periods). 


Korea Small Cap Gem Insights - Relative Outperformance Vs KOSDAQ