[Click eStock] “Samsung Biologics, 4Q Results Below Consensus”

Diversified Business Starting This Year... mRNA Raw Material Drug Production Facility Scheduled to Operate
Daishin Securities "Maintains Samsung Biologics Target Price at 1.1 Million KRW"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Samsung Biologics is expected to report fourth-quarter earnings last year that fall short of market consensus due to increased costs. However, the company is anticipated to diversify its business by operating messenger ribonucleic acid (mRNA) active pharmaceutical ingredient production facilities starting in the first half of this year.

On the 11th, Daishin Securities estimated Samsung Biologics' fourth-quarter sales last year to be 431.6 billion KRW, a 15% increase compared to the same period last year, and operating profit to be 128.5 billion KRW, a 38.8% increase over the same period. These figures are 3.36% and 10.42% below the respective consensus estimates.

The product mix is interpreted to have affected the performance. The increase in product categories and production schedules caused a slight decrease in the utilization rate of Plant 3, which negatively impacted sales. Additionally, increased costs are expected to reduce the operating profit margin. Due to new business activities, year-end bonuses, and increased labor costs from workforce expansion, the operating profit margin for the fourth quarter last year is estimated to have decreased by 7.3 percentage points from the previous quarter to 29.8%.

However, the business is expected to diversify starting this year. The mRNA active pharmaceutical ingredient production facility is scheduled to begin operation in the first half of this year. The supply of Greenlight Bio clinical reagents is expected to be reflected in the second half's performance.

Plant 4 is planned to partially operate in the second half of this year and, if the Good Manufacturing Practice (GMP) certification is completed in the second half of next year, it will be fully operational. Yoonjin Lim, a researcher at Daishin Securities, said, “We are currently negotiating volumes for more than 20 products,” and added, “We expect to secure numerous advance orders before the completion of Plant 4.”

Furthermore, Samsung Biologics is reportedly participating in additional land purchase bids in Songdo and is moving forward with the expansion of Plants 5 and 6. This is expected to accelerate entry into new businesses such as mRNA, cell and gene therapy (CGT), and vaccines, contributing to performance growth based on new business foundations.

Accordingly, Daishin Securities maintained its investment opinion of ‘Buy’ on Samsung Biologics with a target price of 1.1 million KRW. The closing price on the previous day was 836,000 KRW.

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