Company Reports

Samsung Biologics' second-quarter revenue grew 30% year on year to KRW 1.32 trillion, driven by full utilization of its plants. It also announced the acquisition of PolyPeptide, expected to close by year-end. Operating margin fell 270 basis points due to greater depreciation costs.

We initiate coverage on Samsung Biologics with a Narrow-Moat and Medium Uncertainty Rating at KRW 1,700,000 fair value estimate, which reflects a 16% upside based on the May 7 closing price.

Samsung Biologics should continue to enjoy a prominent market position globally as it boasts an industry-leading 845K kiloliter bioreactor capacity backed by a USD 21.4 billion backlog as of the first quarter 2026. Over 80% of revenue comes from the US and Europe, where it services 17 of the world’s top 20 pharmaceutical companies. Its backlog, which has increased from USD 12 billion since the end of 2023, suggests that its clients are signing larger contracts as they entrust Samsung Bio with more products. As such, Samsung Bio’s capacity is growing to satisfy the rising demand, and we expect its backlog to continue to increase given that contract development and manufacturing activity is driven by healthcare industry macro spending, which steadily grows at mid-single-digits annually.

We will discontinue analyst coverage of Samsung Biologics on or about Nov. 12, 2025.

Samsung Biologics' second-quarter revenue grew 11.5% year over year. Management raised its revenue growth guidance for 2025 to 25%-30% from 20%-25% due to improved plant utilization rates and operational efficiency.

Samsung Biologics differentiates itself from other global contract manufacturing organizations by focusing on biologics modalities. Biologics are large-molecule treatments made from living cells with a higher degree of complexity compared with traditional chemically synthesized small-molecule drugs. Biological products include antibodies, vaccines, gene therapies, and many other novel treatments, which are the focus of research and development spending for largely unmet medical needs. Given the interest in this pharmaceutical area, Samsung Biologics’ revenue has expanded at a compound annual growth rate of 45.7% for the past 10 years. We think Samsung Biologics can still enjoy the secular tailwind in demand for biologics for the next decade.

Samsung Biologics announced that it will proceed with plans to separate its contract manufacturing, or CDMO, business from its biosimilar drug business.

Samsung Biologics' first-quarter revenue grew 37% to KRW 1.3 trillion, driven by higher contribution from the completion of Plant 4 in 2024, strong biosimilar sales, and favorable currency impact.

Unlike other global contract manufacturing organizations, Samsung Biologics differentiates itself by focusing on biologics modalities. Biologics are large-molecule treatments made from living cells with a higher degree of complexity compared with traditional chemically synthesized small-molecule drugs. Biological products include antibodies, vaccines, gene therapies, and many other novel treatments, which are the focus of research and development spending for largely unmet medical needs. Given the interest in this pharmaceutical area, Samsung Biologics’ revenue has expanded at a compound annual growth rate of 48.5% for the past nine years. We think Samsung Biologics can still enjoy the secular tailwind in demand for biologics in the next decade.

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.

South Korean President Yoon Suk Yeol declared martial law following parliamentary disputes. The declaration was voted down by parliament.

We slightly raise our fair value estimate for narrow-moat Samsung Biologics to reflect the lift in management guidance. Although third-quarter revenue growth of 14.8% year over year was in line with our expectations, we increase our annual revenue growth forecast to 20.2% from 18.8% as we expect a stronger fourth quarter due to the new fourth plant ramping up capacity. Hence, our fair value estimate rises to KRW 733,500 per share from KRW 709,800. This indicates a price/book ratio of approximately 5 times and 2024-25 price/earnings of around 50 times. We continue to see the shares as overvalued and think investors should wait for a better entry point.

Unlike other global contract manufacturing organizations, Samsung Biologics differentiates itself by focusing on biologics modalities. Biologics are large-molecule treatments made from living cells with a higher degree of complexity compared with traditional chemically synthesized small-molecule drugs. Biological products include antibodies, vaccines, gene therapies, and many other novel treatments, which are the focus of research and development spending for largely unmet medical needs. Given the interest in this pharmaceutical area, Samsung Biologics’ revenue has expanded at a compound annual growth rate of 48.5% for the past nine years. We think Samsung Biologics can still enjoy the secular tailwind in demand for biologics in the next decade.

Narrow-moat Samsung Biologics’ second-quarter earnings are slightly better than expected, driven by the inflow of milestone revenue from its subsidiary Samsung Bioepis. We raise our 2024 annual growth forecast for the firm's biosimilar segment to 34.0% from 26.0%, while keeping the rest unchanged. Hence, our fair value estimate increases to KRW 709,800 per share from KRW 688,700. We think Samsung Bio's shares are mildly overvalued, currently trading at a 20% premium over our fair value estimate. The market is paying a price/earnings ratio of 58.04, based on our 2024 estimated growth. Despite positive market sentiment associated with less exposure to geopolitical risks relative to its Chinese competitors, we currently do not see a strong jump in the number of contract manufacturing projects. We believe that investors should wait for a better entry point.

Unlike other global contract manufacturing organizations, Samsung Biologics differentiates itself by focusing on biologics modalities. Biologics are large molecule treatments made from living cells with a higher degree of complexity compared with traditional chemically synthesized small molecule drugs. Biological products include antibodies, vaccines, gene therapies, and many other novel treatments, which are the focus of research and development spending for largely unmet medical needs. Given the interest in this pharmaceutical area, Samsung Biologics’ revenue has expanded at a compound annual growth rate of 48.5% for the past 9 years. We think Samsung Biologics can still enjoy the secular tailwind in demand for biologics in the next decade.

Unlike other global contract manufacturing organizations, Samsung Biologics differentiates itself by focusing on biologics modalities. Biologics are large molecule treatments made from living cells with a higher degree of complexity compared with traditional chemically synthesized small molecule drugs. Biological products include antibodies, vaccines, gene therapies, and many other novel treatments, which are the focus of research and development spending for largely unmet medical needs. Given the interest in this pharmaceutical area, Samsung Biologics’ revenue has expanded at a compound annual growth rate of 48.5% for the past 9 years. We think Samsung Biologics can still enjoy the secular tailwind in demand for biologics in the next decade.

We initiate coverage on Samsung Biologics with a narrow moat rating sourced from switching costs and a fair value estimate of KRW 688,700. Samsung Biologics is the largest South Korean contract development and manufacturing organization with global revenue of KRW 3.58 trillion as of Dec. 31, 2023. It differentiates itself by focusing on biologics modalities. Riding on increasing demand globally for biologics as novel treatments, Samsung Biologics’ revenue has been expanding at a compound annual growth rate of 48.5% for the past 9 years. We think Samsung Biologics can still enjoy the secular tailwind of biologics in the next decade.