Samsung Biologics Meets Q3 Consensus Despite Strike and FX Headwinds; KRW 2 Million Target Price Maintained

[Financial News] SK Securities forecast that Samsung Biologics would post third-quarter results in line with market expectations despite the strike and foreign-exchange headwinds caused by the stronger won. The brokerage maintained its target price of KRW 2 million and its 'Buy' rating. On the 6th, SK Securities analyst Lee Seon-kyung estimated Samsung Biologics' third-quarter consolidated revenue at KRW 1.3741 trillion, up 9.3% from a year earlier, and operating profit at KRW 609.8 billion, down 3.7%. The estimates are in line with the market consensus of KRW 1.345 trillion in revenue and KRW 606.3 billion in operating profit.
Although the strike in May resulted in cost losses of approximately KRW 150 billion from the production of about 20 batches, and the average exchange rate in the third quarter fell by roughly 5% from the previous quarter, Samsung Biologics is expected to maintain its growth momentum as Plant 5's 'Process Performance Qualification (PPQ)' batches and the U.S. facility begin to make a full-scale contribution to revenue.
In particular, volumes whose production was disrupted by the strike are scheduled to be shipped after coordinating schedules with customers, which is expected to provide an additional contribution to fourth-quarter revenue growth.
The recovery of new orders was also identified as a key variable. New orders have been sluggish as contact with customers declined this year due to tariff issues, but discussions are recovering following the announcement in April of the results under Section 232 of the U.S. Trade Act, leaving room for additional orders within the year.
Plant 5, the U.S. production facility, and expansion into multiple modalities were cited as the company's mid- to long-term growth drivers. Samsung Biologics is pursuing the acquisition of PolyPeptide Group to expand into next-generation modalities, and SK Securities expects the acquisition to be completed within the year.
PolyPeptide Group's target EBITDA margin for 2028 is 25%, lower than that of Samsung Biologics. However, SK Securities assessed that the margin could improve as the contract development and manufacturing organization (CDMO) market for peptide-based biopharmaceuticals grows.
Lee said that short-term uncertainties remain, including labor-management negotiations, foreign-exchange rates, and the accounting impact of the U.S. facility and the PolyPeptide Group acquisition. However, she analyzed that the recovery of new orders, the full-scale contribution of Plant 5 to revenue, and the expansion of the U.S. facility and multiple modalities would support the company's mid- to long-term growth trajectory, making it necessary to focus on growth potential rather than short-term variables.
Meanwhile, SK Securities forecast Samsung Biologics' revenue and operating profit for this year at KRW 5.4471 trillion and KRW 2.4244 trillion, respectively. Next year, revenue is expected to rise to KRW 6.1830 trillion and operating profit to KRW 2.7800 trillion.

[email protected] Kang Jung-mo Reporter