Samsung Biologics: Initiating Coverage of Largest South Korean Contract Manufacturing Organization

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.