Samba Captures Both 'Performance and Stock Price' Amid COVID-19 Crisis

Recorded Earnings Surprise in Q1 This Year... 3rd Factory Achieves 60% of Annual Order Target Early

[Asia Economy Reporter Kum Boryeong] Samsung Biologics has successfully captured both strong earnings and stock price growth amid the COVID-19 crisis.

According to NH Investment & Securities on the 22nd, Samsung Biologics recorded consolidated sales of 207.2 billion KRW in the first quarter, a 65.3% increase compared to the previous year. Operating profit turned positive at 62.6 billion KRW, achieving an operating margin of 30.2%, delivering an earnings surprise.

The biggest factor influencing the performance was production. Production proceeded as scheduled, increasing the operating rates of Plants 1 and 2. The operating rates were 80% for Plants 1 and 2 respectively, and 20% for Plant 3. Thanks to the leverage effect from full operation of Plants 1 and 2, operating profit improved significantly.

The performance improvement trend is expected to continue into the second quarter. On the 10th, Samsung Biologics signed a 440 billion KRW antibody supply contract for COVID-19 treatment with U.S.-based Vir Biotechnology, achieving 60% of this year’s Plant 3 order target ahead of schedule. Additional new orders are expected.

Researcher Han Byunghwa of Eugene Investment & Securities said, "Due to the COVID-19 situation, securing production facilities in various regions and possessing large-scale pharmaceutical production facilities have become key issues in the global bio market. Samsung Biologics’ binding contract with Vir Biotechnology for COVID-19 antibody drug production is for this reason," adding, "Through this contract, Samsung Biologics now faces the need to expand Plant 4 for additional orders."

The stock price is also on a winning streak. The closing price on the 19th of last month was 366,000 KRW, rising to 579,000 KRW the day before, an increase of 58.2% in about a month. Compared to the price range of the late 200,000 KRW to early 400,000 KRW from September to December last year, the stock price has risen significantly after the COVID-19 outbreak. Hong Gahye of Daishin Securities explained, "We expect a positive stock price trend due to mid- to long-term earnings improvement and new facility expansion events."

Brokerages have raised their target prices for Samsung Biologics. Daishin Securities raised it from 530,000 KRW to 640,000 KRW, KTB Investment & Securities from 540,000 KRW to 670,000 KRW, and Eugene Investment & Securities from 510,000 KRW to 620,000 KRW.

This content was produced with the assistance of AI translation services.