[Click eStock] "Samsung Biologics Expected to Achieve 1.5 Trillion Won Operating Profit This Year"

Profitability Expected to Improve with Full Operation of Fourth Plant

There is a forecast that Samsung Biologics will continue to perform strongly this year, with operating profit expected to exceed 1.5 trillion won. Although there will be a temporary increase in costs due to the operation of the fifth plant, analysts expect profitability to improve in the second half as the fourth plant begins full operation.

On January 23, BNK Investment & Securities maintained its "Buy" rating and target price of 1.3 million won for Samsung Biologics for these reasons. The previous day's closing price was 1,014,000 won.

In the fourth quarter of last year, Samsung Biologics reported consolidated sales of 1.2564 trillion won and operating profit of 325.7 billion won. Compared to the same period last year, sales increased by 17.0%, while operating profit decreased by 6.9%. The decline in operating profit was attributed to increased depreciation and selling and administrative expenses at the fourth plant. However, net profit rose by 10.6% year-on-year to 321.5 billion won, driven by foreign exchange gains resulting from a rise in the won-dollar exchange rate.

The company is expected to achieve sales of 5.5549 trillion won and operating profit of 1.5536 trillion won this year, representing increases of 22.2% and 17.7%, respectively, compared to last year. The operation of the fifth plant will begin and related costs are expected to be reflected in the second quarter. Samsung Bioepis may see a slight slowdown in performance growth due to lower milestone inflows compared to the previous year. However, the launch of biosimilars for Stelara, Soliris, Eylea, and Prolia this year is expected to boost Samsung Bioepis's revenue.

Lee Dalmi, a researcher at BNK Investment & Securities, stated, "While the operation of the fifth plant will temporarily increase costs this year, profitability will improve as the fourth plant begins full-scale operation in the second half." She added, "With the recent increase in demand for contract development and manufacturing (CDMO) services, the company signed a 2 trillion won order contract on January 14, and there is still anticipation for the announcement of plans for a sixth plant."