KOSDAQBiotech & Pharma290650

L&C Bio

₩54,100▼ 3.91%2026-10-02 close

Market Cap

₩1.4T

Turnover

₩16.2B

Volume

290,000 shares

Shares out.

27M

PER

—

PBR

4.0×

EPS

-₩5,540

Dividend Yield

0.10%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩50 per share · Prices as of the 2026-10-02 close

Report overview

Re2O Ramp-Up Meets a Large Rights Offering

The ECM skin booster Re2O has lifted both revenue and operating margins, while convertible-bond derivative valuation losses and a rights offering of roughly KRW 140 billion remain the key balance-sheet and share-count variables.

1
Second-quarter 2026 consolidated revenue reached KRW 38.79 billion with operating profit of KRW 8.58 billion, the strongest quarterly showing on record, lifting the operating margin above 22%.
2
The driver is Re2O, an injectable product based on acellular dermal matrix. Per the company's securities filing, Re2O revenue grew from KRW 425 million in 2024 to KRW 7.2 billion in 2025 and KRW 23.6 billion in the first half of 2026.
3
Despite higher operating profit, the 2025 net loss attributable to owners was KRW 138.17 billion, as convertible-bond derivative valuation losses dominated the bottom line.
4
The company said it will raise up to about KRW 140.6 billion by issuing 3.7 million new shares to existing holders with a public offering of any forfeited shares, allocating roughly KRW 105 billion to the Dongtan integrated production site, KRW 20.6 billion to working capital and KRW 15 billion to convertible-bond redemption.
5
The government is reviewing mandatory patient disclosure and record-keeping on human tissue use, leaving the regulatory framework for tissue-derived aesthetic products an open variable.

Business structure

Founded in 2011, L&C Bio is a regenerative-medicine company built on human tissue processing.

It manufactures and sells tissue grafts for skin, bone and cartilage, tissue-based medical devices, pharmaceuticals and cosmetics; it localized the previously imported skin graft MegaDerm, became the domestic leader in skin grafts, and listed on KOSDAQ in 2018.

The business splits into a medical franchise covering surgical grafts for breast reconstruction, burns and tissue repair, and an ECM skin-booster franchise aimed at the aesthetic procedure market.

The key product in the latter, Re2O, is made from acellular dermal matrix in which cells are removed from donated human skin while the extracellular matrix is preserved, then micronized so it can be injected directly into the skin, and it now leads the earnings improvement.

In knee cartilage, MegaCarti has been used at domestic hospitals under the deferred new-health-technology assessment scheme. Overseas expansion began with China.

L&C China, established in 2021 as a joint venture with China International Capital Corporation, became a wholly owned subsidiary after the remaining 24.9% stake was acquired in December 2024, and operates a GMP line in Kunshan, Jiangsu province.

The skin graft MegaDerm Plus won approval from China's National Medical Products Administration, making the company the first foreign player in the Chinese skin graft market, where only four local firms previously held approvals, implying a narrow competitive field.

Revenue is still domestically weighted, however: the company puts the split at 93% domestic and 7% overseas. In Korea's skin-booster market, Pharma Research's Rejuran and VAIM's Juvelook are the benchmark rivals, and incumbent tissue-graft makers such as Hans Biomed and Dohp are also extending into skin boosters.

Earnings trend

Quarterly revenue · Operating profit

₩20.5B-₩1,457,22925Q2₩22.6B₩2.9B25Q3₩24.7B₩2B25Q4₩30.3B₩6B26Q1₩38.8B₩8.6B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩52.6B₩9.5B2022₩68.9B₩7.7B2023₩72.1B₩2.5B2024₩85.5B₩4.4B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩20.5B	-₩1,457,229	−0.0%
2025Q3	₩22.6B	₩2.9B	12.8%
2025Q4	₩24.7B	₩2B	7.9%
2026Q1	₩30.3B	₩6B	19.8%
2026Q2	₩38.8B	₩8.6B	22.1%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩52.6B	₩9.5B	₩4.5B	18.0%	4.6%	85.2%
2023	₩68.9B	₩7.7B	₩48.4B	11.3%	32.9%	67.2%
2024	₩72.1B	₩2.5B	₩141.1B	3.5%	49.6%	61.4%
2025	₩85.5B	₩4.4B	-₩138.2B	5.2%	−69.7%	119.0%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

Annual revenue rose for four straight years, from KRW 52.57 billion in 2022 to KRW 68.87 billion in 2023, KRW 72.09 billion in 2024 and KRW 85.48 billion in 2025, but operating profit followed a different path.

Operating profit shrank from KRW 9.48 billion in 2022 (18.0% margin) to KRW 7.75 billion in 2023 (11.3%) and KRW 2.54 billion in 2024 (3.5%), then rebounded to KRW 4.42 billion in 2025 (5.2%).

Eugene Investment & Securities attributed the margin erosion to rising distributor sales commissions from 2023 and an operating loss of about KRW 5 billion at the Chinese subsidiary in 2024. The quarterly path shows a clearer recovery.

Revenue climbed from KRW 20.50 billion in 2Q25 to KRW 22.56 billion in 3Q25, KRW 24.67 billion in 4Q25, KRW 30.29 billion in 1Q26 and KRW 38.79 billion in 2Q26, while operating profit moved from essentially breakeven in 2Q25 (minus KRW 1.5 million) to KRW 6.00 billion in 1Q26 and KRW 8.58 billion in 2Q26, taking margins to roughly 19.8% and 22.1%.

On August 11, 2026 the company said first-half operating profit on a separate basis rose from KRW 2.2 billion to KRW 15.3 billion, lifting the margin from 7.1% to 27.6%, citing a mix shift toward Re2O plus better manufacturing efficiency and fixed-cost absorption from higher output.

The bottom line, by contrast, diverges sharply from operations.

Net income attributable to owners was a profit of KRW 48.36 billion in 2023 and KRW 141.06 billion in 2024, but swung to a loss of KRW 138.17 billion in 2025, with quarterly losses of KRW 51.46 billion in 3Q25, KRW 72.56 billion in 4Q25 and KRW 28.00 billion in 2Q26; the company and analysts point to derivative valuation losses on convertible bonds triggered by the share-price surge, a non-cash accounting loss.

Cash flow direction changed: operating cash flow was negative at KRW 6.08 billion in 2022, KRW 12.13 billion in 2023 and KRW 8.57 billion in 2024, turning to an inflow of KRW 12.56 billion in 2025.

Total liabilities, however, rose from KRW 180.88 billion in 2024 to KRW 248.10 billion in 2025 while total equity fell from KRW 294.73 billion to KRW 208.53 billion, pushing the debt-to-equity ratio from 61.4% to 119.0%.

Industry analysis

Skin boosters have been among the fastest-growing categories in Korea's aesthetic procedure market, and the underlying material mix is shifting.

A market once centered on hyaluronic acid and polynucleotide products is being reshaped by tissue-derived ECM offerings, intensifying competition between the leader and followers.

L&C Bio holds tissue-bank licensing and a track record in tissue processing and quality control, giving it barriers around raw-material access and manufacturing know-how, while Eugene Investment & Securities has framed expansion by players such as Hans Biomed and Dohp, plus the arrival of similar products, as a sign the ECM market is opening up.

On the supply side, the raw material is donated human tissue, so capacity additions and donor sourcing effectively set the pace of revenue.

The company reports that output of powdered skin grafts including Re2O and MegaFill rose from 74,502 units in 2023 to 217,742 units in 2024, and reached 375,112 units in the first half of 2026, already above the prior full year.

Utilization rose from 59.7% in 2023 to 87.2% in 2024 and 98.4% in the first quarter of 2026, easing to about 88.9% in the second quarter, placing the cycle close to a supply-bottleneck phase.

Medical demand rests on structural drivers such as aging and growth in breast reconstruction and orthopedic surgery, while in China management says strict donor regulations leave finished-product supply short of demand.

On the other side sits regulatory risk: industry observers note that as ethical and safety debate grows over aesthetic use of donated tissue, outcomes may hinge on regulatory readiness as much as on product strength.

Outlook

Management's stated targets are aggressive. L&C Bio has guided to KRW 150 billion of 2026 revenue, of which KRW 50 billion is expected from Re2O alone, and set an overseas Re2O revenue target of KRW 10 billion.

The capacity roadmap has also been raised: from running 24,000 units per month at full utilization, the company now targets 80,000 units per month in the first half of 2026 and 150,000 per month in the second half, above the earlier plan of 50,000 and 80,000.

It added a dedicated powdered-graft line at the Seongnam plant in May 2026 and plans to bring third and fourth plants online in October and December to lift monthly capacity toward 180,000 units.

Longer term, it will invest KRW 105 billion in a Global Integrated Smart Manufacturing and Innovation Center in Dongtan, Hwaseong, targeting completion in the second half of 2029, adding 2.808 million units a year and taking projected 2030 annual capacity to 5.0544 million units including the Seongnam expansion of 2.2464 million.

A legal change shaped the plan: an initial plan for a U.S. production site was redirected domestically after a June 2026 amendment to the Wastes Control Act created a legal basis for using discarded human adipose tissue as medical material.

Overseas registrations are in progress, as the company began exports in 2025 starting with Singapore and Japan and is pursuing approvals in about 20 countries, while GMP approval for the Kunshan plant in China and local-production review for MegaDerm Plus are also under way.

On valuation views, Eugene Investment & Securities raised its target price to KRW 80,000 from KRW 68,000 in a March 2026 report - that is the brokerage's own projection, not our assessment.

Valuation

PER

—

PBR

4.0×

ROE

-46.8%

EPS

-₩5,540

BPS

₩12,042

Dividend per share

₩50

Because the bottom line is driven by convertible-bond derivative valuation losses, the sum of the last four quarters of net income attributable to owners is negative, so an earnings-based multiple cannot be calculated.

The underlying profit engine shows up at the operating line instead: the trailing four-quarter operating margin now sits in double digits, well above the 3.5% posted for full-year 2024 and the 5.2% for full-year 2025.

Relative to book value, the stock trades at a premium, and it is worth noting that self-calculated figures and Korea Exchange published figures use different bases for equity scope and reference dates, so the same ratio can diverge by source.

A dividend is being paid but the absolute amount is small, leaving the yield slight versus the average for KOSDAQ pharmaceutical and biotech names; the company has stated a policy of directing part of annual profit to share buybacks, cancellations and dividends over the medium to long term.

Equally important, the per-share base is set to be reshaped: the final issue price for the 3.7 million-share rights offering is to be fixed on October 8, 2026, and a one-for-one bonus issue is planned thereafter, so with both equity and share count changing, book-value and per-share earnings ratios will need to be recomputed. Current on-screen multiples should therefore be read as pre-offering, pre-bonus-issue figures.

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 2026-09-04

Bull factors

Margin leverage from a single product

Operating profit of KRW 6.00 billion in 1Q26 and KRW 8.58 billion in 2Q26 lifted margins to roughly 19.8% and 22.1%, a different profitability profile from the 3.5% full-year figure in 2024.

Management attributes this to a mix shift toward Re2O, improved manufacturing efficiency from higher volumes and fixed-cost absorption. The company argues it can reuse the raw-material management and production and quality control base built in its legacy tissue business, which underpins the fixed-cost dilution effect.

With utilization already high and capacity being added, there is still room for further operating-margin improvement.

A concrete plan to clear the supply bottleneck

Annual capacity for powdered skin grafts was doubled from 124,800 units to 249,600 units in 2025 and then expanded to 816,000 units a year in the first half of 2026. Third and fourth plants are slated to start up in October and December 2026, taking monthly capacity toward 180,000 units.

The company said that running the 150,000-180,000 monthly capacity to be secured by year-end for a full year would equate to production worth close to KRW 200 billion at current prices, rising above KRW 400 billion a year once the Dongtan plant is complete. Because the build-out schedule paces revenue recognition, verifiable milestones arrive each quarter.

Early entry into China and other overseas channels

MegaDerm Plus entered China's skin-graft market as the first foreign product after NMPA approval, in a market where only four local companies previously held approvals. L&C China has been advancing import approvals for multiple products, with MegaCarti cited as a candidate for an innovative medical device fast track.

Re2O exports began in 2025 with Singapore and Japan, and registrations are in progress in about 20 countries. Overseas weighting remains low, however, so the timing and scale of actual revenue contribution must be checked in the quarterly numbers.

Bear factors

Gap between operating and net results

While operating profit grew, net income attributable to owners stayed negative at minus KRW 51.46 billion in 3Q25, minus KRW 72.56 billion in 4Q25 and minus KRW 28.00 billion in 2Q26.

Derivative valuation losses arising from convertible bonds weighed on the accounts, and the structure - where a rising share price enlarges the loss - has been described as a paradox of share-price gains.

The loss is a non-cash accounting item, yet total equity fell from KRW 294.73 billion in 2024 to KRW 208.53 billion in 2025 and the debt-to-equity ratio rose from 61.4% to 119.0%. Bottom-line volatility persists until the remaining convertible bonds are retired.

Repeated capital raising and dilution

Since April 2025 the company has issued convertible bonds once and completed two equity raisings, with a third now under way. Of the KRW 60 billion convertible bond issued in 2025, KRW 45 billion converted into 2,122,641 common shares in April 2026, and the remaining KRW 15 billion is convertible into 707,547 shares.

Press reports noted divided market opinion on whether a rights offering was necessary given record first-half results. Cash and equivalents stood at KRW 43.8 billion as of the first quarter of 2026, illustrating the gap between the investment program and internally available funds.

Single-product reliance and follower competition

Guiding to KRW 50 billion of Re2O revenue within a KRW 150 billion 2026 target means one product would account for a third of sales. As the skin-booster market shifts toward ECM products, competition between the leader and followers is intensifying, and incumbent tissue-graft makers are extending into skin boosters.

Because the raw material is donated human tissue, sourcing constraints can act as a bottleneck on scaling output. Diversification of the product line and the medical segment's contribution both need to be verified.

Risk factors

Regulatory and policy risk

Critics have argued that Re2O sits in a regulatory grey zone with ambiguous oversight standards, raising fairness and safety questions. The government is reviewing mandatory patient disclosure and transplant-purpose record-keeping, and the company says it will phase these procedures into future production.

Management states no serious adverse events have been reported since launch in 2024, but how disclosure, record-keeping and advertising rules are finalized could change distribution and point-of-care selling conditions. The broader public debate over aesthetic use of donated tissue is itself a demand variable.

Funding and capital structure

Of the plan to raise up to about KRW 140.6 billion, roughly KRW 105 billion is earmarked for the Dongtan site, KRW 20.6 billion for working capital and KRW 15 billion for convertible-bond redemption.

The structure issues 3.7 million new shares to existing holders with a public offering of forfeited shares, so subscription rates and the final issue price will determine actual proceeds and the change in share count.

The Dongtan smart factory targets completion in the second half of 2029, implying a long payback period with depreciation and early fixed costs along the way. This investment program follows a rise in the 2025 debt-to-equity ratio to 119.0%.

Overseas execution risk

Analysts flagged an operating loss of about KRW 5 billion at the Chinese subsidiary in 2024, and continued losses from higher marketing spending to build the China sales network have been cited as a risk.

In China the company has been adding distributor contracts to build its channel following a December 2025 tie-up with Shanghai Jeyalife, so revenue recognition depends on how quickly hospitals and distributors are onboarded.

GMP approval for the Kunshan plant and local-production clearance for MegaDerm Plus are still in process, leaving room for schedule slippage. With overseas exposure still small, approval delays translate directly into timing shifts in the growth scenario.

What to watch next

October 8, 2026
The indicative issue price is KRW 38,000 per new share, with the final price to be fixed on October 8. The confirmed price and subscription outcome will set actual proceeds and the new share count, so all per-share metrics will need recalculation afterward.
October and December 2026
Watch whether the sequential start-up of the third and fourth Seongnam plants lifts monthly capacity to about 180,000 units. With utilization already near 90%, the timing of these additions will pace revenue recognition from the fourth quarter onward.
Mid-November 2026
The third-quarter 2026 report will show whether the roughly 22.1% operating margin from the second quarter holds and whether Re2O revenue is tracking the company's KRW 50 billion annual target. It should also reveal how derivative valuation gains or losses are booked as the remaining convertible bonds are handled.
After the rights offering proceeds are received
The company said it will carry out a one-for-one bonus issue and exercise its call option to acquire and immediately cancel KRW 15 billion of convertible bonds at cost. Completion of the cancellation determines whether the derivative valuation loss driver and the potential dilution overhang are actually removed.
Fourth quarter of 2026 onward
Key items are progress on GMP approval for the Kunshan plant in China and the local-production review for MegaDerm Plus, along with the direction of government rule-making on mandatory patient disclosure and record-keeping for human tissue. The former affects the overseas revenue mix, the latter domestic selling conditions.

Overall view

L&C Bio's recent numbers document a shift in center of gravity from a tissue-graft supplier toward an ECM-based aesthetic and regenerative products company.

Revenue rose from KRW 52.57 billion in 2022 to KRW 85.48 billion in 2025, and on a quarterly basis from KRW 20.50 billion in 2Q25 to KRW 38.79 billion in 2Q26, taking the operating margin to about 22.1%.

Net income attributable to owners, however, swung to a loss of KRW 138.17 billion in 2025, which the company and analysts attribute to non-cash derivative valuation losses tied to convertible bonds.

Operating cash flow turning to an inflow of KRW 12.56 billion in 2025 is a positive shift, though the debt-to-equity ratio also climbed to 119.0% over the same period.

The items to watch are clear: whether the capacity build from the Seongnam expansion through the Dongtan integrated center proceeds as planned, how the roughly KRW 140 billion rights offering plus the bonus issue and convertible-bond cancellation reshape capital structure and share count, and how rules for tissue-derived skin boosters are finalized.

The bull case rests on margin leverage as the supply bottleneck clears and on early overseas channel entry, while the bear case rests on single-product reliance, repeated capital raising and regulatory uncertainty - the two sides are closely balanced. This report is for informational purposes and contains no buy or sell recommendation and no target price.

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.