[Click eStock] "Samba Still Shows Growth Potential... New Growth Drivers Needed"

[Asia Economy Reporter Myunghwan Lee] Samsung Securities announced on the 7th that it maintains a buy rating and a target price of 1,000,000 KRW for Samsung Biologics. The company’s growth potential remains strong, but new growth drivers are needed.

Samsung Securities forecasts that Samsung Biologics’ consolidated sales for the first quarter of this year will increase by 78.3% year-on-year to 464.9 billion KRW, and operating profit will rise by 105.7% year-on-year to 152.5 billion KRW. Despite increased labor costs and regular maintenance expenses for Plant 2, Samsung Securities expects improved performance as the utilization rate of Plant 3, which had slightly declined in the previous quarter, rises.

Samsung Securities projects that operating profit growth this year will slow compared to last year. Excluding Samsung Bioepis, Samsung Securities expects the company’s consolidated sales this year to increase by 21.1% year-on-year to 1.8988 trillion KRW. Operating profit is forecasted to grow by 13.7% year-on-year to 610.6 billion KRW, while the operating margin is expected to decrease by 2.0 percentage points to 32.2%. Despite regular maintenance of Plant 2, production capacity is expected to increase through efficiency improvements across Plants 1, 2, and 3, resulting in more stable performance growth than last year.

Starting this month, Samsung Bioepis will be incorporated as a 100% subsidiary of Samsung Biologics and reflected in consolidated results. However, Samsung Securities stated that there will be no change to the target stock price considering the dilution of shares due to a paid-in capital increase. Samsung Bioepis recorded sales of 847 billion KRW and operating profit of 192.7 billion KRW in 2021. This year, Samsung Bioepis is expected to post an operating profit of 136.3 billion KRW, down 29.3% year-on-year due to the absence of regulatory approval milestones.

Researcher Geunhee Seo of Samsung Securities said, "As Samsung Bioepis is expected to achieve stable performance growth going forward, it will also contribute to alleviating valuation pressure on Samsung Biologics," but added, "From the second quarter of this year, concerns about slowing growth may arise due to a higher base compared to the same period last year, so new growth drivers are needed to resolve this."

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