SK Bioscience Co Ltd: Risk Reward Update

Research evidence excerpt

SK Bioscience Co Ltd: Risk Reward Update

UpdateM

RiskRisk RewardReward– SK Bioscience- SK BioscienceCo Ltd (302440.KS)Co Ltd (302440.KS)

We expect negative earnings until 2030 and visibility is low; UW

PRICE TARGET W25,000 UNDERWEIGHT THESIS

Base case, derived from a discounted cash flow model to best capture the company's ▪Our UW rating reflects the negative

sustainable growth over the longer term. Our WACC assumption is 6.9%. We assume a 7.8% earnings (OP) outlook through to 2030 -

cost of equity (beta 0.8, risk-free rate 3.0% and risk premium 6.0%) and a 4.0% terminal years after the launch of the PCV21 vaccine

growth rate. We believe the 4.0% growth rate is reasonable in view of an aging population (likely in 2028).

and the increase in medicine use. ▪Earnings visibility is low - there is no short-

or long-term earnings guidance. W34,250

expect net profit losses from 2025Consensus Price Target Distribution W23,000.00 W52,000.00 ▪We through 2029 unless there is a significant MS PT

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates sales increase from new business. Plus, the

company is increasing R&D spending for

PCV21.

▪We believe the valuation does not reflect

RISK REWARD CHART our fundamental outlook.

KRW Consensus Rating Distribution

W78,000W78,000(+110.81%)W78,000(+110.81%)(+110.81%) 17% Overweight

80000 33% Equal-weight

50% Underweight

60000 MS Rating

Source: Refinitiv, Morgan Stanley Research

40000 W37,000W37,000W37,000

Risk Reward Themes

W25,000W25,000(-32.43%)W25,000(-32.43%)(-32.43%) Contrarian: Negative

View descriptions of Risk Rewards Themes here

W15,000W15,000(-59.46%)W15,000(-59.46%)(-59.46%)

JUN '25 DEC '25 JUN '26 JUN '27

Key: Historical Stock Performance Current Stock Price Price Target