Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>In 3Q23, <a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics (207940 KS)</a> reported record high quarterly revenue of KRW1.03 trillion, driven by successful ramp-up of plant 4 and full-scale operation of plant 1–3.</li>
<li>Cumulative CDMO backlog surpassed $11.8B and the company has secured 14 of the global top 20 biopharmaceutical companies as its clients.</li>
<li>Encouraged by strong ramp-up of plant 4, Samsung Biologics continues to expect 20%+ revenue growth in 2023. The company targets to complete the construction of plant 5 in April 2025.</li>
</ul>


In 3Q23, Samsung Biologics (207940 KS) reported record high quarterly revenue of KRW1.03 trillion, driven by successful ramp-up of plant 4 and full-scale operation of plant 1–3.
Cumulative CDMO backlog surpassed $11.8B and the company has secured 14 of the global top 20 biopharmaceutical companies as its clients.
Encouraged by strong ramp-up of plant 4, Samsung Biologics continues to expect 20%+ revenue growth in 2023. The company targets to complete the construction of plant 5 in April 2025.


Samsung Biologics (207940 KS): Better-Than-Expected 3Q23 Result; Sees 20%+ Annual Revenue Growth

<ul>
<li>
<a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics (207940 KS)</a> expects 2023 revenue to grow by more than 20% YoY compared to 15–20% YoY growth expectations earlier, due to better-than-expected utilization of Plant 4.</li>
<li>For the first time in the company’s history, Samsung Biologics has won contracts worth nearly KRW3T during the first half of 2023, with eight contracts worth more than KRW100B each.</li>
<li>Anticipating strong demand, Samsung Biologics is building its fifth manufacturing plant with 180KL capacity, which is expected to be completed by April 2025.</li>
</ul>



Samsung Biologics (207940 KS) expects 2023 revenue to grow by more than 20% YoY compared to 15–20% YoY growth expectations earlier, due to better-than-expected utilization of Plant 4.
For the first time in the company’s history, Samsung Biologics has won contracts worth nearly KRW3T during the first half of 2023, with eight contracts worth more than KRW100B each.
Anticipating strong demand, Samsung Biologics is building its fifth manufacturing plant with 180KL capacity, which is expected to be completed by April 2025.


Samsung Biologics (207940 KS): Raises 2023 Sales Guidance Second Time This Year; Buy the Dip

<ul>
<li>
<a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics (207940 KS)</a> reported record-high revenue and operating profit of KRW866 billion and KRW253 billion, up 33% and 49%, YoY, respectively in 2Q23, aided by contract signing spree.</li>
<li>With continued orders from the leading global pharmas, the company’s total cumulative CMO contracts reached to $11.3B in July, up 19% from $9.5B at the end of 2022.</li>
<li>Outlook for H2 is more positive with revenue from Plant 4 will be reflected from Q3. Two new biosimilars launch in the U.S. and EU will also add to revenue.</li>
</ul>



Samsung Biologics (207940 KS) reported record-high revenue and operating profit of KRW866 billion and KRW253 billion, up 33% and 49%, YoY, respectively in 2Q23, aided by contract signing spree.
With continued orders from the leading global pharmas, the company’s total cumulative CMO contracts reached to $11.3B in July, up 19% from $9.5B at the end of 2022.
Outlook for H2 is more positive with revenue from Plant 4 will be reflected from Q3. Two new biosimilars launch in the U.S. and EU will also add to revenue.


Samsung Biologics (207940 KS): Strong Momentum in 2Q23- Revenue Up 33%; Net Profit Jumps 22%

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Korea Stock Exchange Kospi Index / Event-Driven

<ul>
<li>Media reports indicate that the National Pension Service (NPS) could invest up to KRW 11tn (US$8.2bn) in a new index tracking stocks with low Price to Book ratios.</li>
<li>Filtering stocks with market cap higher than US$500m, ADTV of atleast US$1m, div yield of atleast 1.5% and Price to Book less than 1 throws up 94 potential index candidates.</li>
<li>Choosing an index of 50 stocks will require managers to buy between 1.7-3.4% of the float on the stocks. Increasing the number of constituents will reduce the impact.</li>
</ul>


Media reports indicate that the National Pension Service (NPS) could invest up to KRW 11tn (US$8.2bn) in a new index tracking stocks with low Price to Book ratios.
Filtering stocks with market cap higher than US$500m, ADTV of atleast US$1m, div yield of atleast 1.5% and Price to Book less than 1 throws up 94 potential index candidates.
Choosing an index of 50 stocks will require managers to buy between 1.7-3.4% of the float on the stocks. Increasing the number of constituents will reduce the impact.


Korea Value-Up Index: Probable Constituents & Impact of NPS' US$8.2bn Allocation

Korea Stock Exchange KOSPI 200 / Event-Driven

<ul>
<li>Korea banned all short selling in March 2020 and resumed short selling only on <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> index constituents in May 2021.</li>
<li>News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.</li>
<li>There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.</li>
</ul>


Korea banned all short selling in March 2020 and resumed short selling only on KOSPI 200 and KOSDAQ 150 index constituents in May 2021.
News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.
There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.


Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications

South Korea

LegoChem Biosciences, Inc. (LCB) is a researched-based biotechnology company that discovers, develops, and commercializs of medicines.  The Company utilizes chemistry to make biologics more targeted and potent for patients with diseases of highly unmet medical needs.  The Company focuses on therapy within antibiotics, anti-coagulants, oncology, antibody and protein-drug conjugate.

ST Pharm Co., Ltd.  manufactures active pharmaceutical ingredients.  The Company is also engaged in new drug custom manufacturing services, fine chemical business, and bio-therapy businesss.

Celltrion Inc. produces and sells biosimilar products and also provides consignm ent processing service for other companies.  The Company's main product is Abata cept which is for arthritis treatment

Alteogen Inc. is a pharmaceutical research company.  The Company researches and develops bio-medicines such as bio-better and bio-similar.

Yuhan Corporation manufactures and markets various pharmaceutical products on its own and through joint ventures with other global pharmaceutical companies. The Company also produces personal care products, dietary supplements, and veterinary medicines.

Macrogen Inc. provides DNA sequencing and genome research services.  The Company also raises and sells transgenic and knockout mice to biotechnology institutes and pharmaceutical companies.  Macrogen develops DNA chips, which are used to improve the diagnosis and treatment of disease as well.

Celltrion Pharm Inc. manufactures and sells pharmaceutical products.  The Company products inclue drugs for for hepatic diseases, digestion, diabetes, cold and fever, anti-inflammatory, and veterinary medical products.  Celltrion also provides pharmaceutical raw materials.

Sam Chun Dang Pharm Co., Ltd. (SCD) develops, manufactures, and markets medicines for human health care.  The Company specializes in producing medical treatment drugs as well as diagnostic drugs.  SCD Pharm's products include antibiotics, respiratory stimulants, pneumonia diagnosis devices, and many others.

Hanmi Pharm. Company Ltd. produces pharmaceutical products, including antibiotics, vitamins, and intestinal tonics.  The Company also provides beverages and processes soft capsules for other pharmaceutical firms.

Hugel, Inc. is a Bio-pharmaceutical company that focuses on developing beauty/cosmetics related products.  The Company's main products include botulinum toxin and fillers.

Divi's Laboratories Ltd. manufactures pharmaceutical products which include generic drugs and their intermediates. The Company also undertakes contract research activities for other pharmaceutical companies.

Illumina, Inc. develops, manufactures and markets integrated systems for the large scale analysis of genetic variation and biological function. The Company provides a comprehensive line of products and services that currently serve the sequencing, genotyping and gene expression markets for genomic research centers, pharmaceutical companies, academic institutions and biotechnology companies.

IQVIA Holdings Inc. focuses on technology solutions and contract research services. The Company offers a broad range of solutions which includes clinical development strategies, therapeutic expertise, predictive and prescriptive analytics, and patient retention services. IQVIA Holdings serves consumer health, biopharma, and medical technology industries globally.

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

ICON PLC provides contract clinical research services to the global pharmaceutical industry.  The Company manages clinical studies in addition to providing data management, regulatory, and central laboratory services.  ICON currently operates offices in multiple countries.

Medpace Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides cardiovascular, hematology, oncology, neurology, pediatrics, nephrology, and diagnostic services. Medpace Holdings serves patients worldwide.

Lonza is a global partner to the pharmaceutical, biotech and nutrition markets. The company works with healthcare customers to develop, manufacture and commercialize medical treatments and technologies to treat patients against a range of diseases. Founded in the Swiss Alps, Lonza now operates across Europe, North America, South America, Asia and Oceania.

Avantor, Inc. manufactures and distributes chemicals, reagents, and laboratory supplies. The Company offers amino acids, silicones, bioreagents, denaturants, gas, solvents, stains, dyes, and minerals. Avantor serves biopharma, healthcare, education and government, advanced technologies, life sciences, and applied materials industries worldwide.

Charles River Laboratories International, Inc. provides research tools and support services that enable drug discovery and development.  The Company provides the animal research models required in research and development for new drugs, devices, and therapies.  Charles River's customers include pharmaceutical and biotechnology companies, hospitals, and academic institutions.

Bio-Techne Corp develops, manufactures and sells biotechnology products and clinical diagnostic controls. The Company specializes in proteins, cytokines, growth factors, immunoassays and small molecules.

Samsung Biologics Co.,Ltd. manufactures bio-healthcare products. The Company develops, refines, and distributes biopharmaceutical products.

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Samsung Biologics (207940 KS)