[Click eStock] "Bionex, Expanding Biosimilar Orders... Maintaining Top Preference"

[Asia Economy Reporter Ji Yeon-jin] Shinhan Financial Investment announced on the 3rd that it maintains its top pick rating for Bionex, expecting an expansion of order backlogs across all factories in the bio business division and a notable operating leverage effect due to increased utilization rates.

Lee Dong-geon, Senior Researcher at Shinhan Financial Investment, stated, "The pharmaceutical business division is also expected to achieve double-digit sales growth based on a low base effect and aggressive sales efforts," adding, "With rising demand for bio contract manufacturing (CMO), orders for Celltrion biosimilar products are being secured, and cGMP certification is expected as early as next year."

In the fourth quarter of last year, Bionex reported consolidated sales and operating profit of 39.8 billion KRW and 5.9 billion KRW respectively, representing increases of 14.1% and 43.6% year-on-year. The operating profit was an earnings surprise, exceeding Shinhan Financial Investment’s expectations by 23.5%. During this period, sales from Celltrion biosimilar contract manufacturing were reflected, and the bio business division’s performance grew significantly due to increased production volumes from existing partners.

This year, consolidated sales are projected to increase by 18.4% to 159.1 billion KRW, and operating profit is expected to rise by 71.5% to 22.5 billion KRW. The researcher noted, "Currently, the order backlogs for each factory in the bio business division are estimated to be almost at full capacity for the Songdo and Osong plants," adding, "Although first-quarter results will inevitably see a sales decline compared to the previous quarter due to scheduled factory maintenance, the expansion of Celltrion biosimilar production in the second half of the year is anticipated, and other clients are also continuously increasing supply volumes as clinical stages progress. Therefore, annual bio business division sales are expected to grow by about 20% to 70.2 billion KRW."