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Yuhan Corp: Pausing For A Break

Summary

Sales should meet consensus expectations in 3Q18 on the strong performance by the pharmaceutical division but operating profit will likely fall slightly short of consensus.

On a parent basis, we forecast KRW401.5bn in sales (+6.6% YoY) and KRW18.9bn in operating profit (-2.3% YoY, 4.7% operating margin).

We maintain BUY and our KRW300,000 target price in light of the earnings stability of Yuhan Kimberly, which directly affects the pharmaceutical division, net profit, and pipeline momentum.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.