PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩150 per share · Prices as of the 2026-10-02 close
Liporaxel's China insurance listing and export growth are driving an earnings rebound, but quarterly profit swings remain wide.
From January 2026, Liporaxel was listed on China's National Reimbursement Drug List (NRDL), widening prescription access.
In Q2 2026 revenue reached KRW 41.29 billion and operating profit KRW 3.33 billion, the strongest quarter in the recent five-quarter window.
Full-year 2025 net profit attributable to owners turned positive at KRW 1.65 billion, though quarterly results alternated between losses and profits.
Liporaxel's China breast-cancer indication review, previously paused, re-entered the review queue in early September 2026.
The debt ratio stood at 166.4% for 2025, remaining at an elevated level.
Daehwa Pharm is a KOSDAQ-listed mid-tier pharmaceutical company focused on prescription drug manufacturing and sales in Korea, distributing a range of drugs including peptic ulcer treatments and anti-inflammatory analgesics while also running a finished-drug wholesale business.
The company's key growth driver is Liporaxel, an oral anticancer drug built on its proprietary Daehwa Lipid-based Self-Emulsifying Drug Delivery System (DHLASED), which converts intravenous paclitaxel into an oral liquid formulation.
Liporaxel received domestic marketing approval in Korea in 2016, but failed to secure national health insurance reimbursement, which stalled domestic sales, prompting the company to out-license the drug to Chinese partner Haihe Biopharma in 2017 for a total contract value of $25 million.
Haihe Biopharma, together with local distributor 3SBio, began selling Liporaxel in China from early 2025, having obtained NMPA marketing approval for the gastric cancer indication in September 2024.
The company has also secured Chinese approval for an Alzheimer's-disease treatment patch, Rivamensa Patch, through its joint venture JHK Biopharma using transdermal drug delivery system (TDDS) technology, and is separately pursuing Chinese market entry for its hyaluronic acid filler, Amalian.
In the domestic competitive landscape, Daehwa Pharm is smaller in revenue scale than large incumbents such as Yuhan Corporation, GC Biopharma, and Hanmi Pharmaceutical, but seeks differentiation through its specialization in incrementally modified drugs and drug delivery platforms.
Research and development is centered on three research institutes, and the company continues to advance follow-on oral oncology candidates alongside patch formulation development.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩36B | ₩300M | 0.8% |
| 2025Q3 | ₩36.7B | ₩1B | 2.9% |
| 2025Q4 | ₩33.7B | ₩700M | 2.1% |
| 2026Q1 | ₩37B | ₩500M | 1.2% |
| 2026Q2 | ₩41.3B | ₩3.3B | 8.1% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩131.9B | ₩5.8B | ₩1.1B | 4.4% | 1.4% | 143.7% |
| 2023 | ₩141.4B | ₩2B | -₩1.1B | 1.4% | −1.6% | 183.3% |
| 2024 | ₩149.4B | ₩6.7B | ₩500M | 4.5% | 0.7% | 169.6% |
| 2025 | ₩143.1B | ₩3.2B | ₩1.7B | 2.2% | 2.2% | 166.4% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-22
Consolidated revenue for 2025 was KRW 143.06 billion, down 4.3% from KRW 149.41 billion in 2024, while operating profit fell by more than half to KRW 3.16 billion from KRW 6.71 billion, pushing the operating margin down from 4.5% to 2.2%.
Net profit attributable to owners, however, rose to KRW 1.65 billion from KRW 0.53 billion in 2024, a gain that appears to reflect non-operating factors outside the core business.
Over a longer horizon, the company posted a profit of KRW 1.12 billion in 2022, swung to an owners' net loss of KRW 1.15 billion in 2023, and then returned to consecutive profits in 2024 and 2025.
Quarterly results show pronounced volatility: owners' net losses of KRW 0.68 billion and KRW 0.43 billion were recorded in Q2 and Q3 2025 respectively, followed by a sharp jump to a KRW 3.18 billion profit in Q4 2025, a return to a KRW 0.25 billion loss in Q1 2026, and then the strongest quarter of the window in Q2 2026 with revenue of KRW 41.29 billion, operating profit of KRW 3.33 billion, and net profit of KRW 1.93 billion.
Q2 2026 revenue rose 11.5% quarter-on-quarter and 14.8% year-on-year, with the operating margin improving sharply to 8.1%, a pattern that appears linked to expanding export volumes to China.
On the cash flow side, operating cash flow in 2025 was KRW 5.43 billion, similar to KRW 5.25 billion in 2024 and a marked improvement from the KRW 0.21 billion outflow in 2023. The debt ratio rose from 143.7% in 2022 to 183.3% in 2023, then eased to 169.6% in 2024 and 166.4% in 2025, still well above 100%.
Overall, the core domestic drug business appears stagnant, while non-operating items tied to China exports and licensing income have amplified earnings volatility, even as recent quarters show genuine top-line growth.
The domestic pharmaceutical industry remains in a low-growth phase under government drug-pricing regulation and a mature market structure, and incrementally modified drugs like Liporaxel that only change the route of administration have repeatedly struggled to clear reimbursement hurdles tied to weighted-average alternative drug pricing.
In contrast, China's anticancer drug market continues to expand according to Frost & Sullivan data, and paclitaxel-class chemotherapy remains one of the most widely used treatments in China.
That market, however, is populated by numerous low-cost generic injectables, making the pace at which oral-formulation differentiation translates into broader prescribing a key variable.
In the global drug delivery system space, PLGA/PLA-based biodegradable polymer microsphere formulations are drawing attention in the sustained-release injectable market, with one market research estimate projecting an 8.85% compound annual growth rate for the segment.
Domestically, competitors such as Samchundang Pharm are also pursuing commercialization and licensing of long-acting injectables, intensifying competition among drug delivery platform companies.
Daehwa Pharm is one of a small number of Korean companies holding DHLASED and TDDS platforms, and rather than competing head-on with large incumbents, it has pursued a strategy of licensing niche technologies—incremental modifications, fillers, and patches—for overseas expansion.
Liporaxel began operating under NRDL reimbursement pricing across China from January 1, 2026, and China-related revenue in the first half of 2026 was reported at approximately KRW 9.7 billion, positioning it as a key driver of top-line growth.
The Chinese regulatory review for the breast-cancer indication expansion, which had been placed on a temporary pause, was confirmed to have shifted to "queued for review" status as of September 1, 2026, with clinical, statistical, and compliance expert reviews already completed.
Domestically, industry sources have raised the possibility of a renewed reimbursement application using a flexible or dual-pricing scheme referencing the China listing price, with reported contact between the company and the Ministry of Health and Welfare.
Separately, the Alzheimer's-disease treatment patch Rivamensa has already obtained Chinese product approval, and the hyaluronic acid filler Amalian is undergoing its own China approval process, reflecting ongoing pipeline diversification.
The company stated it signed a China supply contract worth approximately KRW 45.2 billion for 2026-2027, with payment terms of within 30 days of shipment to enhance revenue visibility.
With this contract and the reimbursement listing now in place, expanded prescribing and strengthened marketing networks through Chinese partners are likely to be the key variables for future performance.
The current share price reflects a phase of earnings recovery relative to Daehwa Pharm's prior loss-making periods, suggesting the market is assigning some premium to the growth narrative tied to expanding China exports.
In terms of price-to-book value, shares trade at a level that embeds a certain premium over net asset value, indicating growth expectations weigh more heavily on pricing than asset value alone.
On the dividend side, the company has resumed distributing dividends recently, though the level remains below the sector average. Because the company's quarterly earnings swing considerably, valuation metrics calculated around quarters containing one-off gains warrant careful interpretation.
Ultimately, valuation appears to be forming at a balance point between stagnant domestic core operations and growth expectations tied to the China business.
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 2026-08-22
From January 2026, Liporaxel became subject to China's NRDL reimbursement pricing, lowering patient costs and improving prescription access. First-half 2026 related revenue was reported at approximately KRW 9.7 billion, confirming a tangible sales contribution already.
A separate China supply contract worth roughly KRW 45.2 billion for 2026-2027 has also been signed, improving revenue visibility.
China's regulatory review of Liporaxel's breast-cancer indication has emerged from a pause and re-entered the review queue, with clinical, statistical, and compliance reviews reportedly already completed.
The Alzheimer's patch Rivamensa has already secured Chinese product approval, and the HA filler Amalian is undergoing its own China approval process, reducing reliance on the single gastric-cancer indication.
2025 owners' net profit reached KRW 1.65 billion, marking a second consecutive year of profitability after the 2023 net loss. Operating cash flow also stayed in the KRW 5 billion range in both 2024 and 2025, a clear improvement from the 2023 cash outflow. Q2 2026 revenue and operating profit were the strongest in the recent five-quarter window.
2025 consolidated revenue fell 4.3% year-on-year to KRW 143.06 billion, and the operating margin declined from 4.5% to 2.2%. Slow growth in the domestic prescription drug market and pricing regulation structures are cited as constraints on core business growth. Even Liporaxel failed to clear the domestic reimbursement threshold back in 2018.
Owners' net losses were recorded in Q2-Q3 2025 and Q1 2026, while large profits appeared in Q4 2025 and Q2 2026. These swings appear influenced by non-operating or one-off items, making it difficult to gauge the sustainability of future results.
China's anticancer drug market is populated by many low-cost generic injectables, leaving uncertainty over how quickly oral-formulation differentiation translates into broader prescribing. The breast-cancer indication review has previously gone through a pause status, limiting predictability of the regulatory process. The debt ratio also remains elevated at 166.4%.
The China regulatory review for Liporaxel's breast-cancer indication has resumed, but the timing of final approval is not confirmed. The domestic reimbursement re-application is also reportedly still at the discussion stage with the Ministry of Health and Welfare, leaving both outcome and timing uncertain. New pipeline items such as the filler and patch must also clear regulatory review in each target market.
The debt ratio stood at 166.4% in 2025, higher than 143.7% in 2022. Given the wide quarterly swings in earnings, sensitivity to interest expense burden or changes in financing conditions could exist.
China revenue is heavily dependent on the distribution and marketing capabilities of local partners Haihe Biopharma and 3SBio. Milestone and royalty income are tied to specific sales thresholds, so recognition can be concentrated in particular quarters.
Check the Q3 2026 quarterly report for whether China export revenue growth and the operating margin trend continue.
Monitor whether China's CDE issues a final review decision on Liporaxel's breast-cancer indication.
Track progress in discussions with the Ministry of Health and Welfare over a domestic reimbursement re-application and whether a flexible pricing scheme is applied.
Check whether the HA filler Amalian secures Chinese product approval and whether local sales of the Rivamensa patch commence.
Daehwa Pharm is finding an earnings inflection point through Liporaxel's China reimbursement listing and export growth, even as its domestic core business remains stagnant.
Full-year 2025 owners' net profit turned positive, and Q2 2026 posted the strongest revenue and operating profit of the recent quarters, though quarter-to-quarter volatility between losses and large profits continues.
The resumed China review of the breast-cancer indication and pipeline diversification into an Alzheimer's patch and a filler stand out as potential additional growth avenues.
However, the outcome and timing of a domestic reimbursement re-application, the intensity of competition in China, and an elevated debt ratio remain sources of uncertainty.
Investors should track upcoming quarterly reports alongside the progress of Chinese regulatory reviews to assess the sustainability of the earnings trend.
Report written 2026-09-05 · Data as of 2026-09-04
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