Samsung Biologics Co. (207940.ks) Earnings Review: 2Q26 Revenue In Line, Resilient NP Growth despite softer gross margin; FY26 Revenue Expected to Reach Upper End of Guidance

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Samsung Biologics Co. (207940.ks) Earnings Review: 2Q26 Revenue In Line, Resilient NP Growth despite softer gross margin; FY26 Revenue Expected to Reach Upper End of Guidance

mproved visibility on contract conversion, particularly for larger pharma programs,

could become an important catalyst for the shares in 2H26.

PolyPeptide Acquisition Accelerates Multi-Modality Strategy: The proposed

acquisition of PolyPeptide, expected to close by YE26, marks another step in Samsung

Biologics’ strategy to expand into next-generation modalities (See our previous

takeaway) We view the transaction as a strategically attractive entry into peptides, a

large and rapidly growing market that would likely require years to build organically.

Following completion, the key debate would likely shift from strategic rationale toward

execution, particularly whether Samsung Biologics can leverage its manufacturing scale,

operational expertise, and commercial capabilities to improve PolyPeptide’s currently

low-margin profile and accelerate earnings contribution over time. More broadly, the

acquisition reinforces management’s long-term commitment to diversifying beyond

traditional antibody manufacturing, consistent with the previously announced KRW7tn

Bio Campus III investment plan targeting peptides, cell and gene therapy (CGT),

antibody-drug conjugates (ADC), and other emerging modalities.

Valuation and Risks: We fine-tune our 2026-2027 EPS estimates by -0.3%/-0.1%. We

are 3%/8%/6% above Visible Alpha Consensus Data where we are more optimistic on

the revenue growth sustainability. Our 12-m TP of W2,000,000 is based on 12m forward

P/E of 40x, implying 46% upside. Key downside risks: 1) intensifying competition from

both domestic and global players; 2) slower-than-expected capacity ramp-up; 3)