'Samsung BioLogics didn't inflate corporate value'
By Kim Yoo-chul
Samsung BioLogics didn't intentionally inflate its corporate value, a leading research firm said Thursday, citing the continued solid demand for biosimilar products manufactured by contract manufacturing organizations (CMOs) such as the Samsung affiliate.
Nomura Securities estimated the current corporate value of the Samsung BioLogics at about 38 trillion won including an 11 trillion won valuation of Samsung Bioepis, in which Samsung BioLogics owns a controlling 50 percent stake.
The analysis is a major reversal from earlier findings by Korea's top financial regulators which claimed Samsung BioLogics broke accounting rules to inflate its net profit before going public.
“Samsung BioLogics looks set to outgrow the industry at a 28 percent annualized growth rate from last year through 2026, thanks to strong knowhow from Samsung's successful semiconductor factory operations,” the Nomura report said.
Samsung BioLogics said it followed rules supported by the country's top-level accounting firms, adding it might sue the country's two financial regulators.
The Samsung affiliate said the valuation was the result of following IFRS accounting standards and dates back to when its 2015 books were put together. Samsung Bioepis' market value soared on regulatory approvals for its copies of blockbuster biotech drugs.
Bioepis would need to be categorized as an affiliate and not a unit to make a call option. That means BioLogics' books would have to reflect the stake by fair value, not book value, the Samsung affiliate has claimed. That is also supported by the Nomura report.
At the time of its initial public offering (IPO), Samsung BioLogics claimed 5.27 trillion won as its current corporate value, although political activists and lawmakers questioned the company's swing into profit before the IPO.
“Samsung BioLogics' CMO market share is set to double in next 10 years as the company is looking set to build more plants and enhance productivity to lead market growth,” the report stated.
As of Thursday afternoon, senior officials at the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) were in a discussion over the Samsung BioLogics issue.
An official at the FSC, which directs the FSS, didn't respond to requests for comments citing the sensitivity of the issue.