[Click eStock] SK Chemicals' Target Price Rises 10% Due to 'COVID-19 Vaccine Sales'

[Asia Economy Reporter Ji Yeon-jin] Samsung Securities has raised the target price of SK Chemicals by 10% to 550,000 KRW in relation to the domestic sales contract for Novavax's COVID-19 vaccine.

SK Bioscience, spun off from SK Chemicals, has licensed technology from Novavax, which developed the COVID-19 vaccine, and is responsible for the domestic production and distribution of the COVID-19 vaccine. SK Bioscience signed a contract for contract manufacturing (CMO) of Novavax's COVID-19 vaccine bulk, and recently the Korean government announced that it plans to pre-purchase the entire quantity of vaccines produced by SK Bioscience. The purchase volume corresponds to 20 million doses, totaling 400 million doses.

Seokunhee, an analyst at Samsung Securities, said, "Although the selling price of the COVID-19 vaccine is undecided, assuming the average price of 20 dollars for the COVID-19 vaccines currently on sale, a contract worth 800 million dollars is possible," and added, "Applying the average expected operating profit margin of 40% for self-produced vaccines, an operating profit of 200 million dollars is expected to be reflected."

Novavax's vaccine is expected to have its sales reflected from the second half of this year, as the Ministry of Food and Drug Safety is likely to review emergency use approval following the announcement of interim results of Phase 3 clinical trials in the first quarter of this year.