Samsung Biologics Soars on Strong Performance, Continues High Price Rally

[Asia Economy Reporter Song Hwajeong] Samsung Biologics recorded strong earnings in the fourth quarter of last year, drawing attention to how long the stock price rally will continue.

According to the Korea Exchange on the 27th, Samsung Biologics reached an intraday high of 493,000 KRW on the 23rd, setting a new 52-week high. Samsung Biologics has risen 11.55% this year, continuing its record-high streak.

The stock price is being driven up by continued buying from major investors. Last week, foreign investors purchased 80 billion KRW worth of Samsung Biologics shares, ranking first in net buying. Institutions also net bought 21.5 billion KRW during the same period, ranking fourth in net purchases.

In particular, the upward momentum gained further strength after an earnings surprise in the fourth quarter of last year. Samsung Biologics posted sales of 313.3 billion KRW and operating profit of 106.9 billion KRW in Q4 last year. These figures represent increases of 75.7% and 829.6%, respectively, compared to the same period the previous year. Hong Gahye, a researcher at Daishin Securities, analyzed, "Both sales and operating profit significantly exceeded consensus estimates," adding, "Sales increased due to a focus on producing high-priced products and improved factory utilization rates, while operating profit greatly improved due to increased sales and changes in product mix." Hong also noted, "Last year, sales rose 30.9% to 701.6 billion KRW, and operating profit increased 64.6% to 91.7 billion KRW," adding, "Although production volume declined in the first half due to regular facility maintenance, strong performance was achieved in the second half thanks to increased overall factory utilization and favorable exchange rate effects."

The strong performance is expected to continue this year as well. Seo Geunhee, a researcher at Samsung Securities, stated, "Sales this year are projected to reach 934.2 billion KRW, and operating profit 200.4 billion KRW, representing increases of 33.2% and 118.7% year-on-year, respectively," adding, "The upward trend in utilization rates will continue due to expanded approval countries for previously ordered products, increased sales of products in the commercialization stage, and additional orders."