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How far will Samsung Biologics’ shares soar?

Ranking officials sell shares at $700

(Samsung Biologics)
(Samsung Biologics)
Biologics companies are receiving more investor attention than ever due to the COVID-19 pandemic. But the question remains if the sudden buoyance is a bubble that can burst at any moment.

Among the publicly traded Korean biologics companies, market watchers are especially eyeing Samsung Biologics, Celltrion and soon-to-be listed SK Biopharmaceuticals.

Samsung Biologics shares especially soared past the 800,000 won ($660) after the Seoul Central District Court denied an arrest warrant for Samsung Electronics Vice Chairman Lee Jae-yong on June 8. Lee is being investigated by prosecutors for allegedly being involved in a supposed fiscal irregularity at Samsung Bioepis, a joint venture between Samsung Biologics and US’ Biogen. Samsung maintains that this is only a misunderstanding stemming from different modes of accounting.

Further legal proceedings against Lee were postponed to Friday.

Ahead of what may be another fateful day for Samsung, Samsung Biologics’ ranking officials were seen offloading stocks at values ranging from 695,000 won to 850,000 won.

In the company’s shareholders’ notices filed June 16 and Monday, one official sold 1,800 shares for a total of 1.26 billion won and another sold 271 shares for a sum of 230 million won.

These officials are Samsung Biologics’ vice presidents, respectively responsible for the company’s business innovation and facility management.

Samsung Biologics officials in the past have sold stocks at varying points from 500,000 won to even less. Many still hold thousands in their account, lending hope to investors that the company’s value won’t simply plunge. 

Lee Dong-gun, an analyst at Shinhan Investment, said all in all it isn’t a questionable time to sell Samsung Biologics stocks. 

“The company value has soared in anyone’s eyes,” Lee said.

“The general sentiment among investors seems to be that the tide has already turned in favor of Samsung Biologics, and that is what has fueled this sudden growth -- because it is a positive indicator for a business to have legal issues cleared,” Lee said, hinting that he believes whatever happens on Friday is unlikely to pose great headwinds for Samsung Biologics.

“I wouldn’t guess the immediate growth will be so strong after Friday, but regarding the long-term business perspective, we maintain a buy recommendation,” said Lee.

Samsung Biologics was established in 2012. It made its initial public offering in 2016, starting off at 136,000 won price-per-share. The initial market cap of the company had been around 9 trillion won. The company on Tuesday ranked third on Korea’s main bourse Kospi in terms of market capitalization, after Samsung Electronics and SK hynix. Samsung Biologics’ market cap neared 53.4 trillion won.

Samsung Biologics shares oscillated between 800,000 won and 806,000 won on Tuesday, at most up 1.64 percent from the day before.

By Lim Jeong-yeo (kaylalim@heraldcorp.com)
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