[Click eStock] "Samsung Biologics Expected to Slightly Miss Market Expectations for Q4 Earnings"

[Asia Economy Reporter Ji-hwan Park] Samsung Securities stated on the 10th that Samsung Biologics is expected to see a slight decrease in earnings in Q4 this year due to a decline in the operating rate of Plant 3 and increased costs. The investment opinion 'Buy' and the target price of 1,000,000 KRW were maintained.

Seogeunhee, a researcher at Samsung Securities, said, "Despite full operation of Plants 1 and 2, a slight decline in the operating rate of Plant 3 compared to the previous quarter is expected to lead to a decrease in sales, along with a decrease in operating profit due to increased fees and labor costs related to new businesses." On an annual basis, based on strong demand for contract manufacturing organization (CMO) of pharmaceuticals requiring reserve rates, steady sales growth and the value of new businesses are expected to highlight and maintain a long-term high valuation status.

Consolidated sales for Q4 are expected to be 434.1 billion KRW, up 15.7% year-on-year, and operating profit is expected to increase by 46.7% to 135.9 billion KRW. Although Plants 1 and 2 are operating at full capacity, a slight decline in the operating rate of Plant 3 compared to the previous quarter is expected to cause a decrease in sales. Additionally, operating profit is expected to decline due to increased costs such as fees related to new businesses, personnel recruitment, and performance bonuses.

Following cost burdens in Q4 last year and slow sales growth due to regular maintenance in the first half of this year, there may be short-term downward pressure on Samsung Biologics' stock price, but it is evaluated that continuous earnings growth is possible through efficiency improvements in existing antibody drug CMO plants.

Researcher Seogeunhee emphasized, "Sales growth is expected from Q4 with the concrete expansion strategy of new businesses such as cell and gene CMO and mRNA CDMO, as well as the start of operations at Plant 4," adding, "The overall stance of investors toward Samsung Biologics is not expected to change significantly."

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