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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Hana Securities announced on July 24 that the upcoming spin-off of Samsung Biologics, scheduled for the third quarter of this year, is expected to have a greater impact on the company's valuation than its earnings. The brokerage raised its target price from KRW 1.31 million to KRW 1.45 million while maintaining a "Buy" rating. The previous closing price for Samsung Biologics was KRW 1.064 million.
For Q2 2024, Hana forecasts Samsung Biologics (Biologics) to report standalone revenue of KRW 1.0142 trillion and operating profit of KRW 477 billion, up 25.2% and 44.9% year-over-year, respectively. Meanwhile, Samsung Bioepis (Epis) is expected to see revenue and operating profit decline by 24.3% and 65.1% year-over-year to KRW 401 billion and KRW 89.8 billion, respectively.
Analyst Sunah Kim explained that the continued improvement in Biologics' cost structure, coupled with increased utilization of Plant 4, helped absorb the fixed costs associated with the recent ramp-up of Plant 5 operations.
While Bioepis appears to show a significant drop in quarterly results, this is attributed to a one-time milestone payment of KRW 220 billion received in Q2 2023. In fact, its product revenue grew approximately 28% year-over-year.
Hana Securities highlighted that Bioepis is responding to intensifying biosimilar competition by expanding its product portfolio and geographic presence and securing private-label partnerships with Pharmacy Benefit Managers (PBMs), supporting a positive outlook for the second half of the year.
The brokerage emphasized that investor focus should shift toward the upcoming spin-off and post-spin-off strategies. During the trading suspension period—from September 29 to October 29—Samsung Biologics is expected to announce plans for construction of its sixth plant and potential U.S. facility investments, while Bioepis will outline its new drug development strategy.
“The Q2 earnings growth was largely driven by Biologics, and the upward revision of the target price reflects its increasing corporate value,” Kim noted.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
