Analysts at securities companies have raised target stock price for Samsung BioLogics, which succeeded in turning its first annual surplus since its establishment in 2011.
Samsung BioLogics announced recently that its operating profit turned around to a surplus of 63 billion won ($58.4 million) last year, a 307 percent increase from 2016. During the same period, the company recorded sales of 459.8 billion won, a 56.1 percent increase, while its deficit narrowed with a net loss of 99.2 billion won.
The company explained that sales increased and profitability improved due to improved productivity at its first and second plant.
“The sales of the Renflexis, a Remicade biosimilar, have been sluggish due to the late releases. However, Benepali, an Enbrel first-mover biosimilar in Europe, is already generating sales of $370 million with a market share of 30 percent,” said Kevin Jin, an analyst at Korea Investment and Securities, Thursday. “My company maintains a buy position on Samsung BioLogics as it revises up its discounted cash flow-based target price 20 percent from 440,000 won to 530,000 won.”
Samsung Securities also maintained a buy position on Samsung BioLogics’ shares.
“Our company maintains its buy position on Samsung BioLogics as it revises up its target price 11.7 percent from 438,500 won to 490,000 won,” said Lee Seung-ho, an analyst at Samsung Securities. “We expect the company to enter a full-fledged growth phase in 2018 as capacity utilization rises at its two plants, its third plant starts operations, and as Samsung BioEpis, its subsidiary, successfully reached its breakeven point (BEP).”
However, some analysts did not share the optimistic view of the company and took a more cautious approach.
IBK Securities shifted its position on Samsung BioLogic from buy to neutral on Thursday.
“Our company agrees with the long-term growth potential of Samsung BioLogics’ antibody CMO business, as the company is set to sell 19 antiviral drugs in the top-50 sold drugs by 2022, while clinical trials for such drugs are sailing smoothly,” said Park Si-hyung, an analyst at IBK Securities. “However, the current share price is similar to the value derived from the assumption that the company’s third factory will be 100 percent operational.”
Therefore, it is important to watch whether there are changes in the fundamentals such as the visible production rate of the third plant and the successful entry of its biosimilars in the market, Park added.