PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩300 per share · Prices as of the 2026-10-02 close
Kyungdong Pharmaceutical has posted two consecutive years of profit recovery after the 2023 shock from its shift to a contract sales organization (CSO) model, but hitting its annual revenue target and managing its balance sheet remain open tasks.
2025 operating profit of KRW7.67 billion and owner net profit of KRW8.53 billion mark a second straight year of profit expansion since the 2023 operating loss
H1 2026 revenue of KRW100.1 billion topped the KRW100 billion mark for the first half for the first time in company history, with the operating margin also improving year on year
Achieving the 2026 full-year revenue target of KRW230 billion requires roughly 30% more revenue in H2 than in H1
The debt ratio rose from 20.6% in 2022 to 40.6% in 2025 amid rising CSO commission fees and investment in a new plant and R&D center
Mid- to long-term investments in the Hwaseong Yanggam smart factory and Godeok R&D center, plus a possible retirement of remaining treasury shares, are key items to watch
Founded in 1975 and listed on KOSDAQ, Kyungdong Pharmaceutical is a finished-drug manufacturer focused on developing and producing generic and improved (reformulated) versions of prescription (ETC) drugs.
Its business is divided into a pharmaceutical segment, which accounts for the bulk of revenue, plus a smaller property-leasing segment and other segments.
Within the pharmaceutical segment, the hyperlipidemia combination pill Duoloban tablet accounts for roughly 66% of sales and the joint-health soft capsule Alpotin accounts for about 27%, indicating heavy reliance on a small number of products.
The company runs a "first-generic" strategy of being first to market once a patent expires, holding more than 15 first-generic products that can command relatively higher reimbursement prices.
It has recently been expanding its chronic-disease combination pill lineup, including Nasopra tablet, a combination of naproxen and esomeprazole, and Baldipine Plus tablet, Korea's first triple-combination hypertension drug.
Since 2023, the company has downsized its in-house sales force and shifted to a contract sales organization (CSO) model, outsourcing its distribution channels. Beyond pharmaceuticals, it launched the premium healthcare brand WIAVIM to enter the health-supplement and quasi-drug markets.
Compared with large domestic peers such as Yuhan Corporation, Chong Kun Dang, GC Biopharma, and Hanmi Pharmaceutical, its revenue scale is much smaller, and it competes among mid-to-small pharmaceutical companies by leveraging formulation technology to work around patents and by maintaining cost competitiveness.
Overseas, it exports active pharmaceutical ingredients to China, Japan, and Vietnam, and finished drugs to Central Asia, the Middle East, and Latin America.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩49.4B | ₩500M | 1.0% |
| 2025Q3 | ₩48.9B | ₩3.1B | 6.3% |
| 2025Q4 | ₩52.2B | ₩2.6B | 4.9% |
| 2026Q1 | ₩47.8B | ₩2.4B | 5.0% |
| 2026Q2 | ₩52.3B | ₩3.7B | 7.1% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩182.7B | ₩8.3B | ₩12.2B | 4.5% | 4.7% | 20.6% |
| 2023 | ₩162.7B | -₩25B | -₩20.7B | −15.3% | −9.1% | 28.2% |
| 2024 | ₩193.9B | ₩2.6B | ₩5.5B | 1.4% | 2.5% | 37.5% |
| 2025 | ₩196.3B | ₩7.7B | ₩8.5B | 3.9% | 3.7% | 40.6% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-21
Consolidated revenue in 2025 came to KRW196.3 billion, a slight increase from KRW193.9 billion in 2024, continuing at a record level. Operating profit rose sharply to KRW7.67 billion in 2025 from KRW2.62 billion in 2024, marking a second consecutive year of improvement from the KRW24.95 billion operating loss in 2023.
Owner net profit also moved from a loss of KRW20.71 billion in 2023 to a profit of KRW5.47 billion in 2024 and KRW8.53 billion in 2025.
On a quarterly basis, operating profit was only KRW0.48 billion in Q2 2025 but improved to KRW3.09 billion in Q3 and KRW2.57 billion in Q4, then KRW2.41 billion in Q1 2026 and KRW3.70 billion in Q2 2026.
Over the trailing four quarters (Q3 2025 through Q2 2026), combined revenue reached about KRW201.1 billion, operating profit about KRW11.77 billion, and owner net profit about KRW17.83 billion, all exceeding the prior full-year figures.
Owner net profit of KRW5.78 billion in Q2 2026 was the highest in this recent stretch, which the company attributed partly to valuation gains on financial instruments.
The operating margin recovered from -15.3% in 2023 to 1.4% in 2024 and 3.9% in 2025, and reached 6.1% in H1 2026, up 4.0 percentage points from 2.1% a year earlier.
This reflects a simultaneous decline in the cost-of-sales ratio and the SG&A ratio, with sales efficiency gains from the stabilizing CSO structure cited as the driver of margin improvement.
On the other hand, the debt ratio has risen steadily from 20.6% in 2022 to 40.6% in 2025, indicating that balance-sheet pressure has grown alongside the earnings recovery.
Korea's pharmaceutical industry continues to grow moderately, driven by an aging population and rising demand for treatments of chronic conditions such as hypertension, hyperlipidemia, and diabetes, while the generic drug market faces both intensifying competition by active ingredient and ongoing price regulation.
Discussions on reforming the drug pricing system are under way, and industry observers note that pharmaceutical companies with a high share of reimbursed generic drugs could face greater profitability pressure going forward.
In contrast, the market for chronic-disease combination pills is in a relatively high-growth phase, since such products can improve treatment efficacy and dosing convenience simultaneously.
In terms of competitive positioning, large players such as Yuhan Corporation, Chong Kun Dang, GC Biopharma, and Hanmi Pharmaceutical are showing resilient performance on the back of new-drug and biologics pipelines and defensive earnings, while mid-to-small companies including Kyungdong Pharmaceutical are focused on structural improvement to secure earnings stability.
Within the domestic industry, the shift of sales organizations to a contract sales organization (CSO) model to cut fixed costs is spreading, and Kyungdong Pharmaceutical is cited as an early adopter of this model, having introduced it in 2023.
However, outcomes vary widely across companies pursuing CSO transitions, and some later adopters have swung into losses due to initial cost burdens, suggesting that execution capability and the pace of operational stabilization are key variables.
In its voluntarily disclosed value-up plan from March 2026, the company set a 2026 revenue target of KRW230 billion.
H1 revenue of KRW100.1 billion topped the KRW100 billion half-year mark for the first time in company history, but achieving the target requires roughly KRW129.9 billion in H2 revenue, about 30% more than H1.
The company has laid out plans to expand overseas sales through stronger global sales efforts, along with recruiting talent and building new organizational units to open new markets.
On the production side, it is building a cGMP-grade smart factory on its Hwaseong Yanggam site with total investment of KRW70 billion, aiming to secure more than triple its current production capacity upon completion and use the facility as an export base for developed markets.
It has also laid out a mid- to long-term roadmap to build a new headquarters and R&D center in the Godeok Business Valley in Seoul's Gangdong district, targeting a transformation into a global healthcare company by 2030.
On the pipeline side, the company obtained approval for Baldipine Plus tablet, Korea's first triple-combination hypertension drug, while its generic version of tegoprazan, Tegozan tablet, is set to go on sale from August 2031 when the substance patent expires, with a nine-month first-to-market exclusivity already secured.
However, the direction of the government's drug pricing system reform has not yet been finalized, leaving profitability exposed given the company's generic-heavy business structure.
On shareholder returns, the company has proposed maintaining its dividend policy and retiring treasury shares to enhance shareholder value, though the actual scale and timing of any retirement remain undecided.
Kyungdong Pharmaceutical has shown two consecutive years of profit recovery since the operating loss in 2023, and recent quarterly results have exceeded the prior full-year figures.
Its price-to-book ratio has historically traded at a discount to net asset value on multiple occasions, reflecting the earnings volatility seen over the past several years.
On the dividend front, a notable feature is that the company has maintained a high payout policy strong enough to be classified as a high-dividend company under Korea's tax incentive law.
That said, as a mid-to-small pharmaceutical company whose profit scale is not large relative to its market capitalization, its trading multiples can be interpreted differently depending on the sustainability of earnings improvement, the stability of the CSO structure, and the payoff from new plant investment.
Supply-and-demand factors such as whether remaining treasury shares are retired and how exchangeable bond conversion volume is absorbed are also worth watching when assessing valuation.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-08-21
Operating profit has improved for two straight years since the 2023 CSO transition, reaching KRW7.67 billion in 2025 and about KRW11.77 billion on a trailing four-quarter basis. The cost-of-sales ratio and SG&A ratio have declined together, showing a clear improvement in margin structure. The operating margin in H1 2026 rose to 6.1%, up 4.0 percentage points from 2.1% a year earlier.
The company holds more than 15 first-generic products, giving it a structure that can command relatively higher reimbursement prices. New combination pills such as Nasopra tablet and Baldipine Plus tablet continue to expand its chronic-disease treatment lineup. Its tegoprazan generic, Tegozan tablet, has also secured first-to-market exclusivity as a future growth card.
Production capacity is expected to expand more than threefold once the Hwaseong Yanggam smart factory is completed, and the cGMP-grade facility is planned to serve as an export base for developed markets such as the United States and Europe.
The company already exports active pharmaceutical ingredients to China, Japan, and Vietnam, and finished drugs to Central Asia, the Middle East, and Latin America, providing a foundation for further overseas expansion.
Achieving the 2026 revenue target of KRW230 billion requires H2 revenue about 30% higher than the H1 figure of KRW100.1 billion. Even with the H1 improvement, the gap to the full-year target remains large, and whether it is met will depend on the H2 operating environment.
Industry observers point out that rising commission fees since the CSO transition have simply shifted the SG&A structure from personnel costs to outsourcing fees.
The debt ratio has also risen steadily from 20.6% in 2022 to 40.6% in 2025, meaning balance-sheet management pressure has grown alongside the earnings recovery.
Discussions on reforming the government's drug pricing system are ongoing, and industry observers note this could pressure profitability given Kyungdong's business structure, which is heavily weighted toward reimbursed generic drugs. The direction and timing of any reform have not yet been finalized, leaving uncertainty in place.
Given its generic-heavy business structure, the company faces the persistent possibility of reimbursement price cuts stemming from government drug pricing reform. Given past rebate violations found between 2018 and 2021, ongoing compliance management of sales practices is also required.
The debt ratio has trended up from 20.6% in 2022 to 40.6% in 2025, and if the KRW10 billion exchangeable bond it issued is fully converted, about 1,495,215 new shares could enter the market. Depending on how remaining treasury shares are handled, additional share supply pressure could also emerge.
Pharmaceutical segment revenue is concentrated in just two products, Duoloban tablet (about 66%) and Alpotin soft capsule (about 27%), so intensified competition or price cuts affecting either product could have a relatively large impact on results. How much new combination pills and generics can reduce this concentration will be a key factor.
Check the Q3 report for Q3 revenue and operating profit, and assess progress toward the full-year revenue target of KRW230 billion.
Watch for a board decision on whether to retire the remaining treasury shares (about 5% of shares outstanding).
Confirm the completion and start-up timing of the Hwaseong Yanggam smart factory and whether production capacity actually expands as planned.
Monitor whether the government finalizes drug pricing system reforms and how they affect generic drug pricing.
Kyungdong Pharmaceutical suffered its first operating loss in company history following the 2023 CSO transition, then recovered profits in both 2024 and 2025, with trailing four-quarter results now exceeding the prior full-year figures.
In H1 2026, the company topped KRW100 billion in half-year revenue for the first time, and its operating margin improved markedly year on year, giving numerical confirmation to its structural turnaround.
However, meeting the full-year revenue target of KRW230 billion requires a substantial step-up in H2 revenue versus H1, and the direction of the government's drug pricing reform remains uncertain.
The shift of the SG&A structure toward outsourcing fees under the CSO model, alongside a rising debt ratio, is a balance-sheet issue that warrants continued monitoring.
Investments in the Hwaseong Yanggam plant and the Godeok R&D center, along with an expanding chronic-disease combination-pill pipeline, have been presented as mid-to-long-term growth drivers, though their actual payoff depends on completion and commercialization timelines.
Shareholder-return and supply-related issues, such as the potential retirement of remaining treasury shares and absorption of exchangeable bond conversion volume, are also worth tracking in parallel.
Overall, Kyungdong Pharmaceutical sits at a juncture where a structural earnings recovery (via the CSO transition) coexists with growing challenges around revenue growth and balance-sheet management.
Report written 2026-09-05 · Data as of 2026-09-04
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