1. What Happened? Q2 Earnings Breakdown
Samsung Biologics reported Q2 2025 revenue of KRW 1.29 trillion (a slight decrease QoQ), operating profit of KRW 475.6 billion (beating market expectations), and net profit of KRW 324.4 billion (a decrease QoQ). The continued decline in revenue is a concern, while maintaining a high operating margin (37%) is positive.
2. Why These Results? Unpacking the Drivers
The revenue decline is attributed to a combination of factors, including decreased orders in the CDMO segment, rising raw material prices, and foreign exchange fluctuations. Conversely, the high operating margin reflects efficient production and operational strategies, coupled with growth in the biosimilar business.
3. What’s Next? Future Outlook
In the short term, the positive operating margin offers potential for stock price appreciation. However, the continued decline in CDMO revenue will be crucial for long-term growth. External factors like exchange rates and interest rates, along with the resolution of past accounting-related legal disputes, are also key variables. Expansion into new businesses like ADC and mRNA could provide long-term growth momentum.
4. What Should Investors Do? Action Plan
- Short-term investors: Proceed with caution due to potential volatility, and consider strategies to capitalize on positive momentum.
- Long-term investors: Closely monitor the CDMO segment’s recovery and the performance of new businesses.