[Weekly HOT Stocks] Samsung Bio, Industry and Earnings 'Positive'... Individuals Net Buy 95.7 Billion Won

[Asia Economy Reporter Kum Boryeong] Samsung Biologics has attracted significant interest from individual investors over the past week.

According to the Korea Exchange on the 27th, individual investors net purchased 95.7 billion KRW worth of Samsung Biologics shares from the 21st to the 25th. It ranked 5th among the top net purchases by individual investors in the KOSPI market, following Samsung Electronics, Hyundai Motor, Shinpung Pharmaceutical, and Samsung Electronics Preferred.

Samsung Biologics is analyzed to be in a positive situation regarding industry conditions, investments, and performance. Meritz Securities estimated Samsung Biologics' Q3 operating profit at 65 billion KRW and sales at 251.7 billion KRW, representing increases of 175.3% and 36.2% year-over-year, respectively. This is attributed to increased operating rates and higher batch prices at the 2nd and 3rd plants.

One of the investment points for Samsung Biologics is the increase in contract orders due to the favorable condition of the Contract Manufacturing Organization (CMO) industry. Following the COVID-19 pandemic, demand for CMOs has risen, significantly boosting Samsung Biologics' contract orders. In the first half of this year alone, contracts exceeding 180 million USD were signed.

Researcher Kim Jiha of Meritz Securities explained, "The order backlog was 260 million USD at the end of last year but increased significantly to 390 million USD in Q2 this year," adding, "Since the 3rd plant's operating rate is still in the 20% range, there is sufficient production capacity, so additional contract orders can be expected in the second half."

Unit prices are also steadily increasing. Comparing the value obtained by dividing total order amount and backlog by production volume, the backlog-based unit price rose from 172 USD per liter in 2017 to 218 USD per liter this year.

Another investment point is the solid investment plan. Last month, Samsung Biologics announced the expansion of the 4th plant with a capacity of 256,000 liters. This decision came just three years after completing the 3rd plant, which was already the world's largest single plant by capacity.

Researcher Kim said, "Upon completion of the 4th plant, the position as the world's No.1 global CMO company is expected to be further solidified," adding, "The 4th plant is over 40% larger than the 3rd plant. Upon completion, the first complex production base with a total capacity of 620,000 liters will be established, capturing about 30% of the global CMO market."