Korea Investment & Securities projected on June 29 that Samsung Biologics will report second-quarter results in line with market consensus. The firm maintained its "buy" rating but lowered its target price by 13% to 1.95 million won, reflecting a valuation adjustment across the healthcare sector.
Samsung Biologics is expected to achieve second-quarter revenue of 1.3096 trillion won, a 29% increase from the same period last year, with an operating profit of 588 billion won, up 23%. The operating profit margin is estimated to be 45%, consistent with consensus estimates.
The impact of costs related to batch disposal from a partial strike in early May is expected to be limited, as revenue recognition for these batches will be deferred to the third quarter. Additionally, the continued strength of the dollar is seen as favorable for the company's performance.
On an annual basis, revenue is projected to reach 5.3002 trillion won, with operating profit at 2.4051 trillion won, representing a 16% increase year-over-year. Samsung Biologics has previously stated its guidance for annual revenue growth of 15-20% at BioUSA.
Despite ongoing wage and collective bargaining disputes, analysts believe that production losses incurred during the strike can be recovered within the year, ensuring the company meets its annual performance targets. However, there may be long-term profitability pressures due to rising labor costs following the resolution of negotiations.
Korea Investment & Securities identified the resumption of large-scale new contracts in the second half of the year as a key variable for stock price reevaluation. Existing contracts with current clients have increased by approximately $170 million, but new contracts have yet to be disclosed. The operational capacity of the U.S. plant is around 50%, indicating sufficient room for additional orders. Discussions are reportedly ongoing with potential clients regarding a production strategy that connects operations in the U.S. and South Korea.
Wi Hye-joo, an analyst at Korea Investment & Securities, stated, "We lowered the target price considering the decline in the healthcare index, and it is important to pay attention to when uncertainties regarding U.S. pharmaceutical tariffs are resolved."
* This article has been translated by AI.
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