On the first day following their spin-off, Samsung Biologics and Samsung Epis Holdings experienced a significant decline in stock value, attributed to valuation pressures. Despite this, the securities industry views the spin-off positively, focusing on their potential for long-term growth.
On November 24th, according to the Korea Exchange, Samsung Biologics was trading at 1.668 million won, down 7.18% from the previous day, despite initially rising to a market capitalization of 85.2 trillion won. The decline was due to profit-taking. Samsung Epis Holdings also fell sharply by 29.8% shortly after its initial listing, and was currently down 20.7% at 484,500 won.
The simultaneous decline in the companies’ shares reflects the valuation reassessment process following their re-listing, leading to short-term valuation concerns. Before the trading halt, Samsung Biologics had a market cap of approximately 86.9 trillion won. The spin-off ratios were 65% for Samsung Biologics and 35% for Samsung Epis Holdings based on net asset value, resulting in a re-listing market cap of approximately 56.5 trillion won and 30.4 trillion won, respectively.
Currently, Samsung Biologics’ market cap stands at around 77.2 trillion won, while Samsung Epis Holdings is approximately 12.1 trillion won. Compared to the valuation basis, Samsung Biologics increased, but Samsung Epis Holdings fell significantly. This is due to Samsung Biologics’ CDMO business being fully valued, while only the biosimilar business of Samsung Epis Holdings is evaluated.
Analysts express optimism about the spin-off, as it provides clear long-term growth prospects by allowing the CDMO and biosimilar businesses to operate independently. Jeong Leesoo, an analyst at IBK Investment & Securities, stated that Samsung Biologics’ CDMO business value is now more prominent, emphasizing its global production capacity, high growth rate, and profitability, which give it a strong competitive edge.
Jeong set a target price of 2.09 million won (market cap of 96.6 trillion won) for Samsung Biologics, citing factors such as an average annual sales growth rate of 23.2% over the past three years, the largest global production capacity, and an EBITDA margin of 46.3% in 2024.
Regarding Samsung Epis Holdings, he noted that its stock adjustment is inevitable as only the biosimilar business value is reflected initially, but there is potential for highlighting its drug pipeline through R&D synergy with its subsidiary, Episnex Lab, and ADC candidate clinical entry. The value of Samsung Epis Holdings is given as a market cap of 12.1 trillion won and a target price of 490,000 won.
Meanwhile, with the passing of the BIOSECURE Act in the U.S. Congress aiming to reduce dependency on China for biopharmaceutical supply chains, Samsung Biologics is seen as a major beneficiary, with expectations for expanded global orders. Samsung Biologics has secured large contracts, enhancing its global CDMO status and continuing its factory expansion momentum. Analyst Lee Dalmi from SangSangIn Securities expects that consistent large orders and factory expansion momentum will positively affect the stock price, projecting next year’s sales at 5.39 trillion won and operating profit at 2.23 trillion won.