[Click eStock] "Samsung Biologics, Continued Earnings Growth... Target Price Up"

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[Asia Economy Reporter Song Hwajeong] On the 12th, KTB Investment & Securities raised the target price of Samsung Biologics from 980,000 KRW to 1,000,000 KRW, citing continued strong earnings growth following solid results in the second quarter of this year. The investment rating was maintained at 'Buy.'

Samsung Biologics' second-quarter earnings are expected to meet market consensus. KTB Investment & Securities estimated Samsung Biologics' consolidated sales for the second quarter to be 371.1 billion KRW, a 20.6% increase year-on-year, and operating profit to be 106.6 billion KRW, up 31.4%. Researcher Lee Jisoo of KTB Investment & Securities explained, "In the second quarter, with the completion of maintenance at Plant 1, its operating rate is expected to normalize, and the operating rate of Plant 3 is expected to rise. As the proportion of higher-priced products increases, an improvement in operating profit is also anticipated."

Sales from initial production at Plant 3 are expected to be reflected in the second half of the year, with earnings growth becoming more pronounced as the year progresses. The researcher forecasted, "Sales in both the third and fourth quarters are expected to grow compared to the previous quarter, and annual sales for this year are projected to reach 1.4599 trillion KRW, a 25.3% increase year-on-year."

Active pre-orders for Plant 4 are also expected to continue. As of the end of April, 22 Requests for Proposal (RFPs) related to Plant 4 have been signed, with additional RFPs anticipated. The researcher stated, "Going forward, the actual number of signed main contracts will be more important than the number of RFPs. Despite the COVID-19 pandemic, contract orders through non-face-to-face real-time virtual tours will continue."

Production of COVID-19 vaccines is also expected to accelerate. Expansion of mRNA drug substance (DS) production facilities is underway, with production expected to begin by the end of 2022. Production of Moderna's COVID-19 vaccine drug product (DP) is expected to ramp up starting in August. The researcher added, "DP production facility expansion will be completed next year, and after expansion, there is a possibility of additional DP contracts with other biopharmaceutical companies besides Moderna. With diversification of the contract manufacturing organization (CMO) business portfolio, including mRNA vaccines and cell and gene therapies, sustained earnings growth is expected."

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