KOSDAQBiotech & Pharma239610

Hlscience

₩5,210 0.00%2026-10-02 close

Market Cap

₩28.1B

Turnover

₩3,954,070

Volume

766 shares

Shares out.

5.4M

PER

—

PBR

0.3×

EPS

-₩2,190

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

Shrinking Revenue, Persistent Losses—China Export Is the Swing Factor

HL Science's core health functional food revenue has contracted for several years amid continuing operating losses, and the market is watching whether its China partnership and new CDMO/genetic-testing businesses can turn the trend.

1
2025 revenue fell to KRW 16.7 billion year-on-year, while the operating loss widened to KRW 11.05 billion.
2
First-half 2026 quarterly revenue stayed low at roughly KRW 2.1–2.5 billion per quarter, with quarterly losses continuing.
3
Since its 2000 founding, sales of flagship items such as barley sprout and pomegranate products have fallen sharply, shrinking the company's revenue base well below its 2021 peak.
4
The company has signed an exclusive supply agreement with a subsidiary of Shanghai Pharmaceuticals Holding for joint/cartilage health products and is working to expand export channels into China.
5
The debt ratio remains very low at around 2–4%, keeping the balance sheet stable, but operating cash flow has turned increasingly negative in recent periods.

Business structure

Founded in 2000, HL Science is a KOSDAQ-listed bio-healthcare company that develops, manufactures, and distributes health functional foods based on natural-material research.

Its core business centers on proprietary brands including barley sprout, pomegranate, joint/cartilage products (Wooseul Joint 100 / HL-Joint 100), and milk thistle, with the barley sprout and pomegranate lines historically accounting for a substantial share of sales.

The company was the first in Korea to enter the contract development and manufacturing (CDMO) business for Ministry of Food and Drug Safety-approved individually recognized functional ingredients, and it states it operates an integrated one-stop system spanning R&D, product planning, manufacturing, distribution, and genetic analysis services.

In 2022 it completed a CMO smart factory in Chungju Enterprise City dedicated to supporting individually recognized ingredients, expanding its contract manufacturing capacity. More recently it has expanded into direct-to-consumer (DTC) genetic testing services.

As a pillar of its overseas expansion strategy, the company signed a strategic exclusive supply agreement with Shanghai Pharma Health Science, a subsidiary of Shanghai Pharmaceuticals Holding, for its joint and cartilage health functional products.

Competitively, the sector has seen OEM/ODM-focused players such as Novarex, Cosmax NBT, and Kolmar BNH gain share on the back of export growth, and HL Science's combination of proprietary brands with individually recognized ingredient CDMO capability is cited as a differentiating factor.

However, sharp declines in flagship brand sales over recent years suggest the business portfolio is still in a phase of restructuring.

Earnings trend

Quarterly revenue · Operating profit

₩5.8B-₩3.1B25Q2₩3.5B-₩2.6B25Q3₩2.4B-₩2.4B25Q4₩2.1B-₩2.2B26Q1₩2.5B-₩2.8B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩52.8B-₩600M2022₩25.6B-₩4.7B2023₩17.7B-₩9.9B2024₩16.7B-₩11.1B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩5.8B	-₩3.1B	−52.9%
2025Q3	₩3.5B	-₩2.6B	−76.0%
2025Q4	₩2.4B	-₩2.4B	−101.6%
2026Q1	₩2.1B	-₩2.2B	−105.2%
2026Q2	₩2.5B	-₩2.8B	−111.6%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩52.8B	-₩600M	₩1.6B	−1.1%	1.5%	4.3%
2023	₩25.6B	-₩4.7B	-₩1.4B	−18.3%	−1.3%	3.3%
2024	₩17.7B	-₩9.9B	-₩7.9B	−55.8%	−8.3%	3.3%
2025	₩16.7B	-₩11.1B	-₩11.9B	−66.2%	−14.4%	2.7%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23

Earnings analysis

Consolidated revenue fell to KRW 16.71 billion in 2025 from KRW 17.66 billion in 2024 and KRW 25.59 billion in 2023, continuing a multi-year decline; compared with KRW 52.76 billion in 2022, revenue has shrunk to less than a third over three years.

The operating loss widened every year, from KRW 0.6 billion in 2022 to KRW 4.69 billion in 2023, KRW 9.86 billion in 2024, and KRW 11.05 billion in 2025, indicating that the loss structure has become entrenched alongside the shrinking top line.

The operating margin deteriorated from -1.1% in 2022 to -66.2% in 2025, suggesting that declining sales magnified the relative burden of fixed costs.

Net income attributable to owners swung from a KRW 1.59 billion profit in 2022 to losses of KRW 1.38 billion in 2023, KRW 7.88 billion in 2024, and KRW 11.92 billion in 2025, with the loss expanding significantly.

On a quarterly basis, revenue dropped sharply from KRW 5.82 billion in 2025Q2 to KRW 3.45 billion in 2025Q3 and KRW 2.35 billion in 2025Q4, before showing a modest recovery to KRW 2.13 billion in 2026Q1 and KRW 2.50 billion in 2026Q2, still at a low level.

Quarterly operating losses over the same period ranged from about -KRW 3.08 billion in 2025Q2 to -KRW 2.25 billion in 2026Q1 and -KRW 2.79 billion in 2026Q2, showing no clear improvement.

Notably, the owners' net loss widened sharply to -KRW 4.57 billion in 2025Q4, a level well above other quarters, raising the possibility of one-off factors.

Operating cash flow also deteriorated, from +KRW 3.95 billion in 2022 to -KRW 1.96 billion in 2023, -KRW 3.59 billion in 2024, and -KRW 7.05 billion in 2025, showing a clear decline in cash-generating capacity.

Industry analysis

The domestic health functional food market has maintained modest long-term growth, driven by rising income levels, an aging population, and growing preventive health awareness, though industry observers note that growth has recently plateaued.

Brand- and distribution-focused companies face limited profitability amid rising costs and intensifying distribution/marketing competition, while OEM/ODM players such as Novarex, Cosmax NBT, and Kolmar BNH are structurally gaining market share.

Overseas exports, particularly to China, have emerged as a growth driver: health functional food exports rose sharply year-on-year in the January–July 2025 period, with exports to China posting double-digit growth.

Against this backdrop, several companies including Caregen, NKMax, and EnzyChem Lifesciences have signed or are pursuing supply agreements with Chinese partners.

HL Science is pursuing a similar strategy through its agreement with Shanghai Pharma Health Science, but given its comparatively small revenue scale, its market position remains relatively weaker than larger OEM/ODM players such as Novarex and Cosmax NBT.

In the individually recognized ingredient CDMO market, only a limited number of ingredients generate meaningful revenue, making the ability to commercialize new ingredients or products a key competitive differentiator.

Outlook

The company is positioning China exports as a new growth pillar, anchored by its exclusive supply agreement for joint and cartilage products with a Shanghai Pharmaceuticals Holding subsidiary, framing this as a key response to the multi-year revenue decline.

However, the pace and scale at which this agreement translates into actual sales have not yet been clearly reflected in quarterly results, with quarterly revenue remaining in the low KRW 2.1–2.5 billion range through the first half of 2026.

The individually recognized ingredient CDMO business run through the Chungju smart factory is another variable for earnings improvement, contingent on whether contract manufacturing agreements expand; securing new CDMO clients or raising utilization could help stabilize revenue.

New businesses such as DTC genetic testing services remain at an early stage, and whether their revenue contribution becomes meaningful will need to be confirmed through future disclosures.

The steady increase in the largest shareholder's stake through early 2026 can be read as a sign of management's confidence in the company, though this fact alone does not guarantee an earnings turnaround.

Key items to watch going forward include disclosed volumes for China exports, any new individually recognized ingredient CDMO contracts, and whether quarterly revenue breaks out of its declining trend.

Valuation

PER

—

PBR

0.3×

ROE

-13.3%

EPS

-₩2,190

BPS

₩15,361

Dividend per share

₩0

The company's share price relative to net assets reflects several years of deteriorating earnings and shrinking equity, and it tends to trade at a discounted level in the market. This stems from the steady erosion of total equity as losses have accumulated since 2022, leaving little premium over net asset value.

Traditional earnings-based valuation comparisons are of limited use given that net losses have persisted through the most recent four-quarter window, and the key variable is that the scale and direction of earnings have fundamentally changed compared with the profitable period around 2022.

On dividends, no payout has been confirmed in the most recent fiscal year, making shareholder returns comparatively limited versus peers in the sector that do pay dividends.

Ultimately, judging the current valuation going forward will likely hinge on whether earnings recover and how quickly new revenue sources such as China exports materialize.

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 2026-08-23

Bull factors

China Export Partnership

The company signed an exclusive supply agreement for joint and cartilage products with a Shanghai Pharmaceuticals Holding subsidiary, establishing a foothold in the large Chinese market.

Korean health functional food exports have recently shown double-digit growth centered on China, giving the company an opportunity to ride the broader industry export trend. If the agreement converts into actual sales, it could provide a catalyst for quarterly revenue, which has remained at a low level.

Financial Stability from a Low Debt Ratio

With a debt ratio of only around 2–4%, the company maintains a financial structure with almost no borrowing burden. This suggests relatively low financial distress risk despite continuing operating losses, though continued weakening in cash generation could eventually test this stability.

CDMO and New Business Diversification

The company is diversifying its business portfolio through the individually recognized ingredient CDMO business at its Chungju smart factory and its DTC genetic testing service.

This can be viewed as a strategy to reduce dependence on branded product sales, and confirmation of new contracts or clients could support revenue diversification.

Bear factors

Multi-Year Revenue Contraction

Revenue fell from KRW 52.76 billion in 2022 to KRW 16.71 billion in 2025, shrinking to less than a third in three years.

The sharp decline in sales of former flagship products such as barley sprout and pomegranate has been cited as the main cause, and quarterly revenue remained at a low level through the first half of 2026 without a clear sign of recovery.

Widening Operating Losses and Cash Burn

The operating loss widened every year, from KRW 0.6 billion in 2022 to KRW 11.05 billion in 2025, and operating cash flow deteriorated from a surplus in 2022 to -KRW 7.05 billion in 2025. The simultaneous revenue decline and loss expansion suggest fixed costs have become a relatively larger burden. Continued cash burn could eventually raise the need for additional capital.

Erosion of Shareholders' Equity

Total equity has steadily declined from KRW 104.3 billion in 2022 to KRW 82.8 billion in 2025 due to accumulated net losses. If this trend continues, it could pressure overall financial soundness metrics and potentially offset the strength of the low debt ratio.

Risk factors

Earnings/Cash Flow Risk

Revenue decline and operating loss expansion are occurring simultaneously, and operating cash flow has remained persistently negative. If this trend continues over the long term, additional liquidity measures may become necessary. There is also a possibility of a recurrence of sudden loss expansion in a specific quarter, as seen in 2025Q4.

Overseas Execution Risk

Even after signing a China export agreement, the actual customs clearance, distribution, and regulatory approval process could face delays or disruptions. External factors such as changes in the counterparty's business strategy or intensifying local competition could also affect the pace at which revenue materializes.

Brand and Demand Recovery Risk

There is no confirmed recovery in demand for flagship brands such as barley sprout and pomegranate, and intensifying competition and channel diversification in the health functional food market make brand sales recovery more difficult. If new ingredients or products fail to generate meaningful sales, revenue stagnation could persist.

What to watch next

Mid-November 2026
The 2026Q3 quarterly report disclosure should be checked for signs of whether revenue and operating loss trends are bottoming out.
During Q4 2026
Disclosures and IR materials should be checked to see whether the China export agreement with Shanghai Pharma Health Science translates into actual shipments and sales, and at what scale.
Around March 2027
The 2026 annual business report should be reviewed to confirm full-year revenue, operating loss, and net loss figures, and to check whether the equity erosion trend continues.
Upon future disclosure
If further disclosures on the largest shareholder's stake changes occur, the direction and context of such changes should be reviewed.

Overall view

HL Science has seen continuous revenue contraction since 2022 alongside widening operating and net losses each year, driven largely by a sharp decline in demand for flagship brand products such as barley sprout and pomegranate.

While the very low debt ratio keeps the balance sheet structure stable, the deterioration in operating cash flow and the steady erosion of shareholders' equity warrant attention.

The company is seeking a revenue recovery through new initiatives including a China export agreement with a Shanghai Pharmaceuticals Holding subsidiary, its individually recognized ingredient CDMO business, and genetic testing services, but no clear improvement signal has yet appeared in quarterly results through 2026Q2.

The largest shareholder's expanding stake reflects management confidence but does not guarantee an earnings turnaround. Key items to watch going forward include whether China exports translate into actual revenue, whether quarterly sales bottom out, and whether the equity erosion trend continues.

Investors should continue monitoring upcoming quarterly and annual disclosures as well as follow-up news on the China export initiative before drawing conclusions.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.