Samsung Securities said on the 23rd that Samsung Biologics' first-quarter results are solid but orders are stagnant. It maintained a "buy (BUY)" rating and lowered the target price to 2.1 million won from 2.2 million won. The previous trading day's closing price of Samsung Biologics was 1,561,000 won.
Samsung Securities projected Samsung Biologics' first-quarter sales this year at 1.2571 trillion won and operating profit at 580.8 billion won. Those would be up 25.8% and 35%, respectively, from a year earlier.
Seo Geun-hee, an analyst at Samsung Securities, said, "Profitability improved thanks to fixed-cost leverage from full operation of Plants 1–4 and lower SG&A expenses." Seo added, "In the second half, the ramp-up effect at Plant 5 will be fully reflected, sustaining the growth trend."
On an annual basis, the firm expects sales of 5.3111 trillion won and operating profit of 2.4907 trillion won. Those would be up 16.5% and 20.4%, respectively, from the prior year.
However, results from the Rockville, U.S., plant have not yet been reflected. The Rockville production facility (60,000 liters) will begin operations in the second quarter of 2026, with actual revenue recognition expected from the third quarter. In particular, about half of the facility's total capacity is filled with existing orders from GSK, which is viewed positively as it means no initial ramp-up gap.
The main reason for the recent stock underperformance was identified as stagnant order backlog. The cumulative CMO order amount inched up only from $2.12 billion to $2.14 billion, showing a slowdown in growth momentum.
Seo said, "Due to Trump's pressure to manufacture in the United States, global big pharma companies have tended to be more cautious with outsourcing strategies," adding, "Another factor was that existing clients have long-term volume-fixed contracts, which inherently reduces the frequency of new disclosures."
As for the timing of an order backlog recovery, key variables cited were: ▲ securing new customers for the remaining production capacity (CAPA) at the Rockville plant in the United States ▲ groundbreaking for Plant 6 ▲ whether there are advance orders for Plant 5.