Samsung Biologics is increasingly likely to regain its status as a "royal stock" (shares priced over 1 million KRW each) in the domestic stock market, thanks to continuous improvements in its performance.
According to the Korea Exchange on the 8th, Samsung Biologics shares closed at 960,000 KRW the previous day. This price represents a 3.45% increase compared to the previous trading day, with intraday prices soaring up to 979,000 KRW at one point.
The company's shares had been fluctuating within the 700,000 to 900,000 KRW range since last year, leading to evaluations that they were trapped in a "box range." However, starting from the release of the Q2 preliminary earnings on the 24th of last month, the stock experienced a sharp upward trend. Samsung Biologics reported Q2 sales of 1.1569 trillion KRW, a 33.6% increase compared to the same period last year. With sales reaching 2.1038 trillion KRW in the first half alone, expectations have grown for the pharmaceutical and bio industry’s first-ever annual sales of 4 trillion KRW. Operating profit also reached 434.5 billion KRW in Q2, with an operating margin of 38%.
Starting at 845,000 KRW on the 24th of last month when the earnings were disclosed, Samsung Biologics’ stock price rose to 960,000 KRW intraday on the 30th, fueling expectations of its ascension to royal stock status. Although the stock briefly dropped to 853,000 KRW during the "Black Monday" global stock market crash on the 5th, investor sentiment quickly recovered, allowing the stock to recoup losses and achieve further gains.
If Samsung Biologics’ stock price rises just 4.2% more to reach the 1 million KRW mark, it will become the only royal stock in the domestic market. In the past, companies like Samsung Electronics, LG Household & Health Care, Namyang Dairy Products, and NCSoft also achieved royal stock status, but all disappeared due to reasons such as stock splits or industry downturns. Since EcoPro in September last year, there have been no royal stocks in the domestic market. Samsung Biologics itself briefly reached royal stock status in August 2021, hitting an intraday high of 1.047 million KRW, supported by steady performance growth and improvements in the bio industry.
Expectations are growing that if Samsung Biologics’ performance further improves in the second half of the year, additional price increases beyond its royal stock ascension will be possible. This is due to the full-scale "full operation" of its 4th plant, the world’s largest single-factory production capacity (240,000 liters), expected within this year, and the completion of dedicated production facilities for antibodies and antibody-drug conjugates (ADC) also scheduled for this year, expanding production capabilities. Additionally, contracts to fill the increasing capacity continue, with orders reaching 2.5399 trillion KRW this year. If the U.S. biosecurity law, expected to pass within the year, leads to regulatory measures against China, Samsung Biologics could benefit from a ripple effect, further expanding orders.
The securities industry unanimously forecasts Samsung Biologics’ stock price to exceed 1 million KRW. Seungmin Kim, a researcher at Mirae Asset, stated, "Additional new orders going forward could be the trigger to break out of the stock price box range that has persisted since the COVID-19 period," setting a target price of 1.1 million KRW for the company’s shares. Furthermore, 16 securities firms, including Korea Investment & Securities which set a target price of 1.25 million KRW, view Samsung Biologics’ target price as above 1 million KRW.
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