New capacity will become the main driver of Samsung Biologics' earnings growth

Overview

This report is Nomura's company research and 2Q26 earnings review on Samsung Biologics. The core conclusion is that although new order momentum was weak in 2Q26, Nomura believes this reflects order delays rather than deteriorating demand; as Korea's Plant 5, the Rockville plant in the US, and the subsequent construction of Plant 6 progress, commercialization of new capacity should continue to support revenue and profit growth.

Core views

Nomura maintains a Buy view, believing Samsung Biologics will continue to preserve its leading CDMO position through capacity expansion, new order wins, and entry into new business formats such as ADC, GLP-1, and peptide CDMO. 2Q26 margins declined due to upfront cost recognition for Plant 5 and the Rockville plant, but revenue and operating profit were broadly in line with expectations. The company's 2026E revenue growth guidance reached the high end of the prior range, implying about 20% y-y growth.

Analysis framework

The report uses a framework of fundamental earnings tracking, order backlog analysis, capacity expansion progress assessment, and DCF valuation. It focuses on 2Q26 revenue, operating profit, OPM, EBITDA, 2026E revenue guidance, utilization rates at Plant 5 and the Rockville plant, new orders, and cumulative backlog, and maps these variables into 2026-2035F revenue growth, margin, and WACC assumptions.

Methodology notes

• Valuation methodsDCF

  Discounted cash flow valuation

  The target price of KRW2,000,000 is based on DCF valuation, assuming 11% CAGR in 2026-2035F CMO/CDMO revenue, average OPM of 47%, WACC of 7.1%, and perpetual growth rate of 3.0%.

• fundamental_analysisCapacity ramp-up analysis

  Capacity ramp-up analysis

  The report treats Plant 5, the Rockville plant in the US, and future Plant 6 construction as key variables for revenue recognition and profit expansion, focusing on the impact of new facility utilization, customer order delays, and supply disruptions on short- to medium-term earnings.

• order_backlog_analysisOrder backlog tracking

  Order backlog tracking

  The report compares cumulative backlog, non-binding CMO contracts, and new order wins to assess whether short-term order momentum reflects delay or deterioration.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Samsung Biologics (207940.KS)

  Core covered name; Korea-listed CDMO/CMO company

  Strengths

  Leading CDMO position, new capacity at Plant 5 and Rockville, large order backlog, 2026E revenue growth guidance of about 20% y-y, and entry into peptide CDMO and new modality businesses.

  Weaknesses

  1H26 new orders were significantly below the highs of 2024/2025, new facility ramp-up brings upfront costs, and 2Q26 OPM declined y-y.

  Comparison

  The report mentions valuation of global CDMO peers, Korea CRDMO SWOT, and Asia CRDMO highlights, but the core valuation is still based mainly on Samsung Biologics' own DCF.

  Risks

  Construction or ramp-up delays at Korean and US plants, customer order delays, supply disruptions, labor union issues, and financing pressure.

Key data

• 2Q26 revenueKRW1,321bnUp 30.2% y-y, supported by production contribution from Plants 1-4 and a strong US dollar.
• 2Q26 operating profitKRW586.4bnUp 22.9% y-y, broadly in line with Nomura and Bloomberg consensus expectations.
• 2Q26 OPM44.3%-44.4%Down about 2.7 percentage points y-y, mainly due to upfront cost recognition for Plant 5 and the Rockville plant in the US.
• 2Q26 EBITDAKRW698.5bnUp 22.1% y-y, with an EBITDA margin of 52.9%.
• 2026E revenue guidance+20% y-yAt the high end of the prior 15%-20% y-y growth guidance range, mainly supported by contribution from the Rockville plant starting in 3Q26E and the ramp-up of Plant 5.
• Rockville plant revenue contributionabout KRW100bn/quarterCompany guidance includes only the 3Q26E revenue contribution; the report believes there is potential for further guidance upgrades.
• Cumulative order backlogUSD21.7bnUp USD300mn q-q in 2Q26.
• Cumulative order backlog including non-binding contractsUSD24.3bnIncludes non-binding CMO contracts affected by successful product development and site approvals.
• 1H26 new ordersUSD500mnBelow USD4.3bn in 2024 and USD4.9bn in 2025.
• Target priceKRW2,000,000Reduced from KRW2,200,000, based on DCF valuation.
• Current priceKRW1,379,000Price date is 23-Jul-2026.
• Implied upside+45.0%Calculated based on the target price and current price.
• Cash and equivalentsKRW2.2tn2Q26 data; the company expects to support acquisitions and capex with existing cash, operating cash flow, and, if needed, bank borrowings, bonds, or potential equity issuance.

Impact & implications

The investment implication of the report for Samsung Biologics is positive overall: short-term slower order intake and ramp-up costs at new facilities are weighing on margins, but the medium-term growth thesis remains supported by capacity expansion and orders from global pharmaceutical majors. If utilization at Plant 5 and Rockville improves, Plant 6 construction proceeds smoothly, and the PolyPeptide acquisition expands peptide CDMO operations, the company's revenue growth and earnings leverage could continue to be unlocked.

Risks

• Delays in construction of Korean or US plants could hinder realization of the target price.
• Ramp-up costs for Plant 5, the Rockville plant, or PolyPeptide-related facilities could be higher than expected, potentially pressuring margins.
• Customer order delays or continued weakness in new order wins could affect the pace of revenue recognition.
• Supply disruptions or labor issues could affect the improvement in utilization at new capacity such as Plant 5.
• Acquisitions and planned capex may require bank borrowings, bond issuance, or potential equity issuance, bringing financing and dilution risks.

What to watch

• The pace of utilization improvement at Plant 5.
• Revenue recognition and normalization progress at the Rockville plant in the US starting from 3Q26E.
• Whether 2026E revenue guidance will be raised further with additional contribution from Rockville.
• Whether new order wins recover from the low level in 1H26, especially large orders from global pharmaceutical companies.
• Whether Plant #6 starts construction as planned within 2026.
• Post-acquisition integration and commercialization progress in the peptide CDMO market for PolyPeptide.