---
endpoint: analytics
pattern: Healthcare
status: done
latency_ms: 176063
conversation_id: 996ca63d-cfa8-46db-9f05-3a32c941c68b
citations: 0
created: 2026-05-31 20:12:05Z
---

# How does Samsung Biologics’s valuation compare to peers, and what justifies its premium/discount?

# Samsung Biologics (207940 KS) — Valuation vs Peers

CLSA's mid-2025 coverage (Healthcare HC O-PF, target price ₩1,500,000) is the most detailed internal source. CLSA values SBL on **EV/backlog (R² = 0.94 vs Lonza-style P/E)** rather than P/E because it better reflects the firm's order-driven CDMO economics. The peer comparison is anchored on **Lonza Group (LONN SW)** as the global pure-play CDMO benchmark, with **Wuxi Biologics (2269 HK)** as the secondary peer [1][8].

## 1. Headline Multiples — SBL trades at a premium on every metric

| Multiple | 2024A | 2025CL | 2026CL | 2027CL |
|---|---|---|---|---|
| **EV/EBITDA (x)** | 40.5 | 32.0 | 28.1 | 25.2 |
| **EV/Sales (x)** | 17.1 | 13.8 | 12.5 | 11.3 |
| **P/B (x)** | 7.0 | 6.3 | 5.5 | 4.9 |
| Net debt/EBITDA (x) | 0.5 | 0.2 | 0.1 | 0.1 |

Source: CLSA model [4]. EV/EBITDA in the 28–32x range for FY25–26 sits far above the ~15–20x band typical of large-cap pharma services and well above Lonza's historical mid-teens EV/EBITDA range.

**Market cap snapshot (May 2025)**: US$54–56bn on 71.2m shares, 19% free float, 43.1% held by Samsung C&T and 31.2% by Samsung Electronics, with the Kospi at ~2,625–2,644 [5].

## 2. Peer P/E Premium vs Lonza — the cleanest peer-comp signal

CLSA tracks SBL's 12-month forward P/E as a ratio of Lonza's 12MF P/E:

| Date | SBL 12MF P/E ÷ Lonza 12MF P/E |
|---|---|
| May 2022 | **295%** (≈3× Lonza) |
| Sep 2022 | 280% |
| Jan 2023 | 235% |
| May 2023 | 210% |
| Sep 2023 | 245% |
| Jan 2024 | 180% |
| **May 2024** | **135%** (cycle low) |
| Sep 2024 | 180% |
| Jan 2025 | 170% |
| **May 2025** | **160%** |

Source: CLSA, Bloomberg [2]. The premium has **compressed from ~3× to ~1.6×** over three years, but SBL still commands a structural 60% P/E premium to Lonza. On EV/backlog, SBL trades at **3.7x — below its 5-year average and below CLSA's 4.3x target multiple** [2].

## 3. Target Price Construction — The 4.3x EV/backlog bridge

CLSA's ₩1,500,000 TP (=+39% upside from ₩1,082k on 22 May 2025) is built bottom-up [3]:

| Component | Value |
|---|---|
| 2Q26CL maximum backlog | **US$17.6bn** |
| Target EV/backlog multiple | **4.3x** |
| Fair EV | US$75.5bn (₩105.7tn) |
| 2Q26CL net debt | -₩0.8tn (net cash) |
| Fair market cap | ₩106.5tn |
| Shares outstanding | 71.2m |
| **Target price** | **₩1,500,000** |

The 4.3x multiple is derived empirically — EV-to-backlog has a 0.94 R² fit historically, making it more defensible than a P/E that swings on K-IFRS depreciation timing of plant ramps [1].

## 4. What Justifies the Premium

- **Capacity scarcity in global biologics manufacturing.** CLSA's core thesis: "global biologics capacity will not be sufficient to meet the growing demand for biologics" [1][8]. SBL is the world's largest CDMO by stainless-tank capacity post-P4 ramp-up, with P5 ramping and **P6 construction announcement expected as a near-term catalyst** [6].
- **Wuxi Bio BioSecure Act displacement.** US legislation targeting Chinese CDMOs is shifting Western pharma orders to non-China alternatives. CLSA: "Wuxi Bio's weakness caused by BioSecure Act may give Samsung Biologics an opportunity to expand its global leadership in the industry" [1][8]. This is the primary share-divergence trade vs Lonza/Wuxi that CLSA flags as a credibility-builder [6].
- **Order momentum / earnings beat setup.** ₩440bn in fresh orders announced ahead of the May 2025 note, plus 2Q25 OP expected ~10% above consensus on P4 ramp. The premium is supported by visible top-line CAGR and operating leverage as new plants come online.
- **Spin-off unlocks bigger client base.** The May 2025 horizontal split of CDMO from biosimilar (Samsung Bioepis) **removes the conflict-of-interest overhang that had blocked client acquisition of competitors of Bioepis** — specifically Amgen and Regeneron [10]. Post-split SBL becomes a "pure CDMO play" with "valuation transparency" benefits [9][12].
- **K-IFRS contract-based business model.** CDMO order-book economics (multi-year take-or-pay) justify the divergence from a P/E lens — CLSA explicitly cites "differing business models — contract-based vs. development-driven — have hindered proper valuation" as a key reason for the EV/backlog framework over P/E peer comp [12].

## 5. What Caps or Discounts the Premium

- **Lonza/Wuxi multiple compression headwinds.** The fact that the SBL-to-Lonza P/E premium has shrunk from 295% to 160% reflects (a) Lonza's own re-rating and (b) SBL's earnings catching up — both narrow the relative-value gap.
- **Wuxi single-use bioreactor technology risk.** CLSA flags that "if Wuxi Bio's single-use bioreactors experience an unexpected breakthrough, it could diminish the competitive advantage of Samsung Biologics' stainless tank capacity, potentially resulting in a loss of market share" [7][8].
- **Biosimilar pricing & tariff pressure on Bioepis.** Bioepis (the soon-to-be-separated entity) faces tariff and pricing pressure visible in Celltrion's recent print — this had been dragging the consolidated multiple [11].
- **Capacity ramp execution risk.** Plant delays or slower-than-expected ramps would directly compress the backlog-to-revenue conversion that underpins the 4.3x target multiple [7][8].
- **Split-ratio dilution.** The 0.65:0.35 split ratio (CDMO : Holdco) is "slightly unfavourable for SBL shareholders in the short term" because, on earnings power, the CDMO side likely deserved more weight than NAV-based 0.65 [11].

## 6. Internal-Research Bottom Line

SBL trades at a **structural premium to all global CDMO peers** on P/E, EV/EBITDA, and EV/Sales. CLSA's internal coverage argues the premium is justified by (i) scarcity of global biologics capacity, (ii) Wuxi displacement from BioSecure, (iii) visible order/plant ramp pipeline, and (iv) post-spin clean CDMO purity. The premium-vs-Lonza is at the **low end of its 3-year range (160% vs peak 295%)** — implying further premium compression should be limited unless Wuxi technology surprises or P5/P6 ramps disappoint. CLSA reiterates **High-Conviction Outperform with ₩1,500,000 TP** (~39–44% upside in late-May 2025) [1][9].

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**Sources**
[1] Samsung Biologics - HC O-PF (Entering a new phase) — CLSA, 22 May 2025 — 607960304LinqAlpha.PDF (Valuation details, EV/backlog methodology)
[2] Samsung Biologics - HC O-PF (Entering a new phase) — CLSA, 22 May 2025 — Figure 21: SBL 12MF PE / Lonza 12MF PE history table
[3] Samsung Biologics - HC O-PF (Entering a new phase) — CLSA, 22 May 2025 — EV/backlog valuation breakdown table
[4] Samsung Biologics - HC O-PF (Entering a new phase) — CLSA, 22 May 2025 — Key ratios table (EV/EBITDA, P/B, EV/Sales 2021A–2027CL)
[5] Samsung Biologics - HC O-PF (Entering a new phase) — CLSA, 22 May 2025 — Cover snapshot (price, TP, market cap, shareholders)
[6] Samsung Biologics - HC O-PF (Entering a new phase) — CLSA, 22 May 2025 — Catalysts paragraph (divergence vs Lonza/Wuxi, P6)
[7] Samsung Biologics - HC O-PF (Entering a new phase) — CLSA, 22 May 2025 — Investment risks paragraph
[8] Samsung Biologics - HC O-PF (Making the right decision) — CLSA, 27 May 2025 — 607960664LinqAlpha.PDF (Valuation details, risks)
[9] Samsung Biologics - HC O-PF (Making the right decision) — CLSA, 27 May 2025 — Making the right decision intro / reiteration of TP
[10] Samsung Biologics - HC O-PF (Making the right decision) — CLSA, 27 May 2025 — Amgen/Regeneron client-base expansion thesis
[11] Samsung Biologics - HC O-PF (Entering a new phase) — CLSA, 22 May 2025 — Split-ratio discussion / biosimilar pressure
[12] Samsung Biologics - HC O-PF (Entering a new phase) — CLSA, 22 May 2025 — Entering a new phase / horizontal split rationale

