[Click e-Stock] "Samsung Biologics Expected to See Favorable Earnings Growth... Target Price Raised"

Target Price Raised from 1.3 Million Won to 1.35 Million Won

On April 24, Shinhan Investment & Securities raised its target price for Samsung Biologics from 1.3 million won to 1.35 million won, citing expectations of continued favorable earnings growth. The company maintained its 'Buy' investment rating.

Um Minyong, a researcher at Shinhan Investment & Securities, explained, "We have raised our earnings forecasts, taking into account the rapid sales growth at Plant 4, the operation of the antibody-drug conjugate (ADC) production facility, and the commencement of operations at Plant 5 of the second Bio Campus, which was completed in April."

Samsung Biologics achieved an earnings surprise in the first quarter of this year. On a consolidated basis, revenue reached 1.2983 trillion won, up 37% year-on-year, and operating profit rose 120% to 486.7 billion won, both marking all-time highs. Um noted, "The company continues to benefit from a reduction in internal transactions at Biologics, increased sales driven by the stable ramp-up of Plant 4, robust biosimilar sales at Samsung Bioepis, and a favorable exchange rate environment." He added, "On a standalone basis, Biologics' sales grew 49% year-on-year, in line with its annual sales guidance of 20-25% growth. For Bioepis, sales are expected to increase by 43% due to growth in existing product sales and the U.S. launch of the new product SB17, with overall biosimilar product sales projected to grow by 20%. Both companies are expected to achieve favorable earnings growth."

The strong earnings momentum is expected to dispel concerns over tariffs. Um stated, "Recently, concerns over U.S. tariffs have led to an increase in contract development and manufacturing organization (CDMO) contracts with companies that have manufacturing facilities in the United States. However, Samsung Biologics, despite not having manufacturing facilities in the U.S., signed a record-breaking contract worth about 2 trillion won with a European pharmaceutical company in January, bringing its total cumulative orders to $17.8 billion." He emphasized, "The company is maintaining its annual guidance, which should alleviate tariff concerns."