Samsung Biologics Earnings: Lifting Fair Value by 31% on Capacity Expansion and Strong Results

We lift narrow-moat Samsung Biologics’ fair value estimate to KRW 961,000 per share from KRW 733,500. First, Samsung Biologics' 2024 total revenue beat management guidance, our forecast, and PitchBook consensus, raising the base number of our revenue forecast. Second, management indicated a more rapid capacity expansion plan in the earnings call, boosting our growth-rate assumptions. As such, we increase its annual revenue growth rate to an average of 19.1% from 16.9% for the next five years, higher than most of its industry peers. We also nudge our operating margin assumptions higher due to operating leverage. We now view the shares as fairly valued. We think the growth outlook is reflected in its current price level.