---
endpoint: analytics
pattern: Healthcare
status: done
latency_ms: 226707
conversation_id: 233b0cdf-eb8f-41e5-9e2b-33282175887d
citations: 18
created: 2026-05-31 21:23:59Z
---

# What is the investment thesis for Samsung Biologics in the current market environment?

# Samsung Biologics (207940 KS) — Investment Thesis in the Current Environment

## Bottom Line

Samsung Biologics is positioned as **the structural winner in global biologics CDMO**, supported by three reinforcing pillars in the current environment: (1) a **just-completed equity spin-off** that has unlocked a pure-play CDMO valuation and removed conflict-of-interest barriers with clients, (2) **breakaway order momentum** (USD 21.2B cumulative CMO orders, three KRW 1T+ contracts in FY2025) at a time when key Chinese competitor WuXi Biologics is constrained by the U.S. BioSecure Act, and (3) **multi-axis capacity expansion** — domestic ramp (Plants 4 & 5), the GSK U.S. plant acquisition closing 1Q26, and Bio Campus III ground-breaking. CLSA rates the stock **High-Conviction Outperform with a ₩1,500,000 target price** based on 4.3x 2Q26CL maximum backlog [1][3][8].

---

## 1) Why Now — The Catalyst Stack Has Already Begun to Crystallize

CLSA's May 2025 thesis (HC O-PF, TP ₩1,500,000) called for four near-term catalysts: (i) Plant 5 ramp, (ii) potential Plant 6 announcement / overseas plant acquisition, (iii) divergence vs. Lonza/WuXi, and (iv) continued large-pharma order flow [2]. Company disclosures from the **Q4 2025 / FY2025 earnings call** show every one of these catalysts has landed:

| Catalyst (CLSA, May 2025) | Status at Q4 2025 print |
|---|---|
| Plant 5 ramp | Operating; Plant 4 fully ramping — drove **+30% YoY FY25 revenue** to KRW 4,557B [14] |
| Overseas plant acquisition | **Acquired GSK's U.S. manufacturing facility** (KRW 414B / $280M; 60kL capacity); transaction targeted to close **1Q 2026** [18][17] |
| New plant construction | **Land secured for Bio Campus III in Korea** [18]; Bio Campus II Plants 6–8 in the KRW 7.5T (2023–2032) capex plan |
| Large-pharma orders | **Three KRW 1T+ contracts** signed in 2025, including KRW 1.1T with a European pharma; cumulative CMO orders crossed **USD 21.2B** (vs. USD 16.3B at YE24, $17.8B at 1Q25) [16][18][7] |

This sequence of execution has materially validated the May 2025 thesis: what CLSA called potential ("we believe the company will announce Plant 6 construction sooner or later... could be another boost" [10]) has converted to fact.

---

## 2) The Spin-Off — The Structural Lever Has Been Pulled

The horizontal split of CDMO (Samsung Biologics, surviving entity) from biosimilars (Samsung Epis Holdings / Bioepis) — announced 22 May 2025 — **completed in November 2025**, with relisting [17]. Importantly, the market validated the thesis:

| Stage | SBL Market Cap | Epis Holdings | Combined |
|---|---|---|---|
| Pre-announcement (22 May 2025) | KRW 74T | — | KRW 74T |
| Pre-completion (1 Nov 2025) | KRW 79T | — | KRW 79T |
| Post-spin-off (24 Nov 2025) | KRW 78T | KRW 14T | KRW 92T |
| Current (20 Jan 2026) | **KRW 89T** | **KRW 16T** | **KRW 105T = +42% value uplift** [17] |

**Why the split matters for the thesis:**
- **Removes conflict-of-interest with potential clients.** CLSA explicitly flagged this as the unlock for winning blue-chip biologics customers like Amgen and Regeneron that had previously avoided SBL over biosimilar competitive concerns [9].
- **Creates a pure-play CDMO,** allowing valuation to track the CDMO business's structurally higher growth/margin profile rather than being dragged by the development-stage biosimilar economics [9].
- **Enables clean ESG / strategic disclosure** — pre-spin SBL was already moving toward higher transparency (CDP A list, Sustainalytics "Industry Top Rated", MSCI ESG upgrade to BBB) [14].

---

## 3) Earnings Engine — Margin Inflection from Plant Mix

The FY2025 actuals materially exceeded the CLSA forecast set in May 2025:

| Metric | CLSA 25CL (May'25) | Actual FY25 | Variance |
|---|---|---|---|
| Revenue (₩bn) | 5,587 [11] | 4,557 (post-spin reported basis) / **5,702 (pre-spin reported basis)** [14] | Pre-spin basis +2% vs. CLSA |
| Operating Profit (₩bn) | 1,858 [11] | 2,069 (post-spin) / **2,277 (pre-spin)** | **+22% beat (pre-spin basis)** |
| OPM (%) | 33.3% [11] | 41.1% (Q4 post-spin) | **+7.8 ppts** |

The OP beat reflects **operating leverage on Plant 4's full ramp** (still ramping in the CLSA forecast horizon) and FX tailwind, with Q4 alone delivering ₩528B OP at 41.1% OPM (vs. 33.1% in Q4'24) — a +35% YoY revenue and **+68% YoY OP growth** [14].

**Plant utilization trajectory (CLSA estimates, May 2025):**
- Plants 1–3: ~85–87% (near-full) [4]
- Plant 4: 80% by 1Q25, reaching 85–86% by 3Q26 [4]
- Plant 5: First contribution from 3Q25 (~23%), ramping to ~50% by 3Q26 [4]
- Plant 6 / U.S. facility: incremental capacity into 2026+

This staged utilization curve underpins management's **+15–20% YoY revenue guidance for 2026** (excluding the GSK U.S. plant contribution, which closes in 1Q26 and adds further upside) [17].

---

## 4) Competitive Position — The BioSecure Tailwind Is Real

CLSA's thesis explicitly identifies **WuXi Biologics' weakness from the U.S. BioSecure Act** as a market-share opportunity that may accelerate SBL's global leadership [3]. The structural setup:

- **Global biologics capacity is constrained** — installed mammalian capacity has lagged demand, and CDMO share of pharma manufacturing is projected to rise from 25% (2013) → 52% (2028) per CLSA industry data.
- **SBL/Lonza PE gap has narrowed** from 290% (May 2022) to 170% (May 2025), signaling investors rerating SBL toward developed-market CDMO peers rather than discounting it as a Korean cyclical [12].
- **The GSK U.S. plant acquisition** is explicitly framed by management as enhancing "operational flexibility and supply resilience" — i.e., onshoring biomanufacturing aligned with U.S. policy direction [17].
- Of the **global top-20 pharma companies by market cap**, SBL has already penetrated most major accounts; Amgen and Regeneron are the most notable remaining whitespace, with the spin-off lifting prior conflict-of-interest hurdles [9].

---

## 5) Valuation — Pays for Quality and Scarcity

CLSA values SBL on **EV/backlog** (R² = 0.94 vs. EV — the order-based business model fits backlog better than P/E or EV/EBITDA) [3]:

| Component | Value |
|---|---|
| 2Q26CL maximum backlog | US$ 17.6B |
| Target EV/backlog multiple | 4.3x |
| Implied Fair EV | US$ 75.3B |
| FX (₩/US$) | 1,400 |
| Fair EV (₩tn) | 105.4 |
| 2Q26CL net debt (₩tn) | -0.8 (net cash) |
| Fair market cap (₩tn) | 106.2 |
| Shares (m) | 71.2 |
| **Target price** | **₩1,500,000** [8] |

At the May 2025 launch, EV/backlog of ~2.9x sat **below the 5-year average** of ~3.7–3.8x, framing the entry as discounted vs. SBL's own history — and the current ₩105T combined market cap (Jan 2026) [17] is approaching but still below the implied ₩106T fair value, suggesting **incremental upside remains** as 2Q26 backlog crystallizes and the GSK acquisition closes.

---

## 6) Risks to the Thesis

CLSA explicitly flags three risks [13]:

1. **Capacity expansion / ramp-up delays** — Plant 5, GSK U.S. site integration, or Bio Campus III construction slippage. The Plant 4 ramp came in *ahead* of schedule, which is supportive, but Plant 5 was still only ~23% utilized at 3Q25CL.
2. **Competitor disruption** — A breakthrough in WuXi Bio's single-use bioreactor technology could erode SBL's stainless-tank scale advantage; conversely, easing of BioSecure Act enforcement could lessen the WuXi penalty.
3. **Samsung Epis Holdings pipeline failures** — Adverse outcomes in Bioepis biosimilar candidates would hit the still-economically-linked SEH stub (43.3% Samsung C&T cross-ownership remains) and could create headline risk.

**Additional under-monitoring items:**
- Disclosure quality on biosimilars, new modalities (ADC, CGT), and novel-drug strategy is still pending detailed roll-out [13].
- The fractional-share cash-out mechanic and lack of appraisal rights have already been clarified but may still create short-term flow noise around relisting milestones.
- The U.S. GSK facility integration risk — KRW 414B is modest, but operationalizing a new geography is non-trivial.

---

## Synthesis — Why the Thesis Is Higher-Conviction Today Than In May 2025

The May 2025 CLSA HC O-PF call rested on four assumptions: (a) spin-off would be value-accretive, (b) Plant 5 would ramp, (c) Plant 6 / overseas expansion would be announced, and (d) BioSecure dynamics would favor SBL. **As of the FY2025 print, all four have crystallized in the company's favor**: spin-off delivered a +42% combined value uplift, Plant 4 drove +30% YoY revenue with 41% Q4 OPM, GSK U.S. acquisition closes 1Q26 with Bio Campus III land secured, and SBL booked **three separate KRW 1T+ contracts** in 2025 [18][17][14] — a frequency unprecedented in the company's history. 

The thesis has shifted from "potential" to "execution-confirmed," with the next leg of upside driven by (i) GSK plant closing, (ii) Bio Campus III ground-breaking timeline, (iii) 2026 guidance upgrades as the U.S. facility's revenue contribution gets incorporated, and (iv) Amgen / Regeneron client wins now that the conflict-of-interest barrier has been removed.

---

**Sources**

[1] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — investment thesis paragraph — 607960664LinqAlpha.PDF
[2] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — catalysts section — 607960664LinqAlpha.PDF
[3] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — valuation details (EV/backlog, BioSecure rationale) — 607960664LinqAlpha.PDF
[4] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — Plant utilization table (Plants 1–5, 1Q20–3Q26) — 607960664LinqAlpha.PDF
[5] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — 2Q25CL earnings preview vs. consensus — 607960664LinqAlpha.PDF
[6] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — Quarterly new orders 2016–2Q25 — 607960664LinqAlpha.PDF
[7] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — Cumulative CMO contract amount table — 607960664LinqAlpha.PDF
[8] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — EV/backlog valuation derivation — 607960664LinqAlpha.PDF
[9] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — Benefiting minorities (Amgen/Regeneron) — 607960664LinqAlpha.PDF
[10] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — Solid CDMO fundamentals (Plant 5 / Plant 6 / 2Q25 beat) — 607960664LinqAlpha.PDF
[11] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — Financials at a Glance table (2023A–2027CL) — 607960664LinqAlpha.PDF
[12] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — SBL vs Lonza 12MF PE gap — 607960664LinqAlpha.PDF
[13] Samsung Biologics — HC O-PF (Making the right decision) — CLSA (27 May 2025) — front-page summary — 607960664LinqAlpha.PDF
[14] Samsung Biologics Q4 2025 Earnings Call (Plant 4 ramp, 4Q revenue/OP/OPM, 2026 guidance)
[15] Samsung Biologics Q4 2025 Earnings Call (cumulative CMO contracts table)
[16] Samsung Biologics Q4 2025 Earnings Call (USD 21.2B cumulative CMO orders)
[17] Samsung Biologics Q4 2025 Earnings Call (Spin-off market cap +42% value uplift; U.S. facility)
[18] Samsung Biologics Q4 2025 Earnings Call (GSK U.S. facility acquisition; 1Q26 close; Bio Campus III)

## Citations

- [1] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [2] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [3] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [4] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [5] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [6] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [7] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [8] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [9] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [10] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [11] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [12] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [13] **607960664LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960664LinqAlpha.PDF>
- [14] **Samsung Biologics Co.,Ltd., Q4 2025** · external
- [15] **Samsung Biologics Co.,Ltd., Q4 2025** · external
- [16] **Samsung Biologics Co.,Ltd., Q4 2025** · external
- [17] **Samsung Biologics Co.,Ltd., Q4 2025** · external
- [18] **Samsung Biologics Co.,Ltd., Q4 2025** · external

