[Click eStock] "Samsung Biologics, Beneficiary of the Biosecurity Act, Target Price Raised"

Meritz Securities maintained a 'Buy' rating on Samsung Biologics on the 7th, stating that it would be the biggest beneficiary if the U.S. 'Biosecurity Act' passes, and raised the target price from the previous 1.05 million KRW to '1.2 million KRW'. The closing price on the 4th was 999,000 KRW.

On the same day, Junyoung Kim, a researcher at Meritz Securities, said, "The possibility of the Biosecurity Act passing by the end of the year remains, but since a grace period is expected until 2032, the actual benefits should be viewed from a mid- to long-term perspective. In the short term, there will be fluctuations due to the passage of the bill."

The Biosecurity Act was proposed by the U.S. Congress earlier this year to curb Chinese bio companies. According to the bill, Chinese companies specified in the act, such as Beijing Genomics Institute (BGI, Huada), its subsidiary Huada Zizhao (MGI), and Wuxi AppTec, are prohibited from transacting with companies supported by U.S. administrative agencies or the government. Wuxi Biologics, considered one of the global 'Big 4' CDMOs, is also subject to sanctions.

Samsung Biologics' expected consolidated sales for the third quarter of this year are 1.0581 trillion KRW, a 2.3% increase compared to the same period last year, and operating profit is expected to be 299.2 billion KRW, a 6.1% decrease, in line with market expectations. Continued performance growth is anticipated due to favorable exchange rates and ramp-up of Plant 4 (increased production volume).

Researcher Kim analyzed, "Unlike the second quarter, which received about 220 billion KRW in milestones (stage-based technology fees), the third quarter lacks milestones but records about 220.6 billion KRW in internal transaction sales, resulting in a decrease in consolidated operating profit compared to the second quarter," but added, "On a separate basis, sales are expected to reach 982.6 billion KRW and operating profit 422 billion KRW, representing increases of 11.3% and 10.6%, respectively, compared to the same period last year."

The fifth plant is scheduled to be completed in April next year. Since Plant 4 quickly increased its operating rate based on pre-orders, Plant 5 is also expected to ramp up rapidly. After the completion of Plant 5, construction of Plant 6 will begin, which is expected to be completed in 2027.