Daol Investment & Securities assessed on June 30 that uncertainties have increased for Samsung Biologics due to delays in new orders and one-time costs expected from union negotiations. As a result, the firm lowered its target price from 2.2 million won to 2.1 million won.
Lee Ji-soo, a researcher at Daol Investment, stated, "We have revised down our profit estimates for 2027-2028 to reflect the burden of rising labor costs anticipated from union negotiations and delays in new orders. The impact of production disruptions and some disposal costs due to the union strike is expected to be reflected in the third quarter of this year."
However, the impact of the union strike is believed to be limited. Lee added, "The estimated amount of deferred revenue is about 150 billion won, but this volume is expected to be produced within the year, so there will be no change to the annual performance guidance."
The second-quarter results are expected to meet market expectations. Daol Investment forecasts Samsung Biologics will report second-quarter revenues and operating profits of 1.3097 trillion won and 590.6 billion won, respectively. The full operation of Plants 1 to 4 and the effect of the rising won-dollar exchange rate are expected to support these results.
The Rockville plant in the U.S., which began operations in the second quarter, is projected to contribute to sales starting in the third quarter. Lee noted, "Considering the initial operating costs and increased depreciation expenses, the profit contribution will be limited. However, the visibility of large-scale new orders and the momentum of new plant construction are expected to be key triggers for a rebound in stock prices."
* This article has been translated by AI.
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