Samsung Biologics' acquisition of PolyPeptide highlights the attractiveness of peptide CDMOs, but is unlikely to alter China's CDMO competitive landscape in the near term

Overview

This report provides a peer comparison analysis of the China healthcare and pharmaceutical industry, particularly Chinese CDMO companies, in the context of Samsung Biologics' acquisition of PolyPeptide. The core conclusion is that the transaction reinforces market recognition of the attractiveness of the peptide CDMO sector, driven by strong demand for GLP-1 RAs, rapid growth in the peptide CDMO market, and high capacity barriers; however, in the near term, the transaction is more focused on capability acquisition and integration and is unlikely to immediately create a large-scale capacity shock for Chinese CDMO companies.

Core views

The report believes peptide CDMOs are not an easy business to build from scratch, with know-how, capacity construction, and operational efficiency all constituting barriers. Even after entering through the acquisition, Samsung Biologics will need to address PolyPeptide's three consecutive years of losses and the operational management issues at its overseas facilities. Therefore, Nomura does not expect PolyPeptide to expand capacity immediately enough to challenge Wuxi Apptec's dominant position, nor does it believe the transaction will weaken Asymchem's growing capacity supply.

Analysis framework

The report uses an event-driven read-across approach: it treats Samsung Biologics' acquisition of PolyPeptide as an industry signal and evaluates its impact on Chinese CDMO securities based on peptide CDMO growth, GLP-1 demand, sales growth at each company, capacity investment, and operational risks at overseas facilities. The appendix also discloses relevant stock ratings, target prices, current prices, and DCF valuation methodologies.

Methodology notes

• Industry comparisonRead-across analysis

  Infer the attractiveness of the peptide CDMO sector and the potential impact on Chinese CDMO companies from Samsung Biologics' acquisition of PolyPeptide.

  The report does not view the transaction as a direct negative shock to Chinese CDMOs, but instead breaks it down into four dimensions: sector validation, capability acquisition, the pace of capacity expansion, and operational integration risk.

• Valuation methodsDCF

  Target prices are based on DCF models, WACC, and terminal growth rate assumptions.

  The appendix discloses the valuation methodologies for the target prices of securities including Asymchem, Wuxi Apptec, and Samsung Biologics, with WACC assumptions of approximately 6.8% to 10.1% and terminal growth rates of approximately 3.0% to 4.0%.

Asset mapping & comparison

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

• Samsung Biologics 207940 KS

  Acquirer, entering the peptide CDMO sector

  Strengths

  Has an operating foundation in biopharmaceutical CMOs and can rapidly acquire peptide CDMO know-how through the acquisition.

  Weaknesses

  PolyPeptide has recorded losses for the past three consecutive years, creating uncertainty around integration and a return to profitability.

  Comparison

  Compared with Chinese CDMO companies, its near-term focus is more likely to be integration than large-scale capacity expansion.

  Risks

  Factory construction delays, below-expectation integration of overseas assets, and margin pressure.

• Wuxi Apptec 603259 CH/2359 HK

  Leading Chinese CDMO, benchmark for the peptide-related TIDES business

  Strengths

  Its TIDES business leads significantly in scale and growth, with 2025 sales of approximately CNY11bn and a 49% CAGR from 2023-25.

  Weaknesses

  Faces potential intensifying competition, slowing demand, and geopolitical pressure.

  Comparison

  The report believes Samsung Biologics' acquisition of PolyPeptide will not challenge its dominant position in the near term.

  Risks

  Potential excess capacity, intensifying competition, weaker-than-expected demand, and geopolitical risks.

• Asymchem 002821 CH/6821 HK

  Chinese CDMO beneficiary/benchmark security

  Strengths

  Continues to expand capacity and is expected to maintain its ability to provide increasing capacity supply.

  Weaknesses

  Order acquisition and the profitability of overseas bases still require validation.

  Comparison

  The report believes PolyPeptide's near-term capacity expansion will be insufficient to impede Asymchem's incremental capacity supply.

  Risks

  Orders below expectations, failure to win new projects, and widening losses at overseas bases.

• PolyPeptide Group AG PPGN SW

  Target, peptide CDMO asset

  Strengths

  Has an established peptide CDMO business and know-how, with FY25 sales of EUR389mn.

  Weaknesses

  Has recorded losses for the past three consecutive years, with sales growth below that of Wuxi Apptec's TIDES business.

  Comparison

  A platform for Samsung Biologics' entry into peptide CDMOs, but smaller and less growth-oriented than leading Chinese TIDES businesses.

  Risks

  Uncertainty around returning to profitability and integration efficiency; overseas facilities may weigh on margins.

Key data

• PolyPeptide FY25 salesEUR389mnCAGR was 10% from 2023-25.
• Wuxi Apptec TIDES business 2025 salesCNY11bn, approximately EUR1.4bnCAGR was 49% from 2023-25, significantly higher than PolyPeptide's.
• Asymchem 002821 CHCurrent price CNY162.51; target price CNY175.98; rating BuyPrice date: 20-Jul-2026; target price based on DCF, with WACC of 10.0% and terminal growth rate of 4.0%.
• Wuxi Apptec 603259 CHCurrent price CNY124.22; target price CNY164.00; rating BuyTarget price based on DCF, with WACC of 10.1% and terminal growth rate of 3.5%.
• Samsung Biologics 207940 KSCurrent price KRW1,345,000; target price KRW2,200,000; rating BuyTarget price based on DCF, assuming 10% average annual CMO revenue growth from 2026-35F, average OPM of 47%, WACC of 6.8%, and terminal growth rate of 3.0%.

Impact & implications

The main implication for investors is that Samsung Biologics' acquisition provides positive validation for the peptide CDMO sector, particularly its long-term growth prospects driven by GLP-1-related demand; however, near-term competitive landscape changes are limited, while the efficiency advantages and existing capacity footprint of Chinese CDMOs remain supportive. Overseas acquired assets may weigh on margins, and Samsung Biologics' ability to improve PolyPeptide's operations will be an important variable in assessing the intensity of future industry competition.

Risks

• Peptide CDMO demand or orders may fall below expectations.
• Potential industry overcapacity may create pressure on prices and margins.
• Failure to secure new projects.
• Losses at overseas acquired facilities or overseas bases may widen.
• Samsung Biologics' integration of PolyPeptide may be less efficient than expected.
• Geopolitical tensions may affect the valuations and business expansion of Chinese CDMO securities.

What to watch

• Samsung Biologics' progress in integrating PolyPeptide and the pace of its return to profitability.
• Whether PolyPeptide expands capacity beyond expectations and whether such expansion changes global peptide CDMO supply and demand dynamics.
• Orders, revenue growth, and capacity utilization of Wuxi Apptec's TIDES business.
• Asymchem's acquisition of new projects and release of incremental capacity.
• The continued impact of global GLP-1 RA demand on peptide CDMO orders.
• Margin changes at the overseas facilities of Chinese CDMO companies.