Samsung Biologics (207940 KP): Initiate at Buy: Climbing a wall of worry

The stock is down in a bull market but the company is well positioned to benefit from strong industry growth. Investor concerns overblown - we think it will overdeliver on annual guidance as sales and order momentum pick up in 2H. Initiate with a Buy rating and a TP of KRW2,100,000. Samsung Biologics has been out of favour in this year's bull market - the stock is down 17% 2026 y-t-d while the KOSPI up 59%. This is due to: 1) concerns about slowing order momentum; 2) the impact of higher wages; and 3) US tariffs - the company generates c40% of sales from the US. We think these concerns are overblown. After spinning off Samsung Bioepis, Samsung Biologics is now a pure CDMO play and we think it is well positioned to benefit from strong industry growth. We forecast USD3bn of new orders in 2026e (USD0.8bn y-t-d) and USD6-7bn in 2027-28e vs USD4.3bn in 2025. The company issued guidance for 15-20% y-o-y sales growth in 2026, but we think it can overdeliver with 22%. Three catalysts: 1) a new