Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Bio stocks in the heyday
By Lee Min-hyung
By Lee Min-hyung
Biotechnology firms here are enjoying their heyday on the steep rise of stock valuation, with shares of industry leaders picking up steam for upward spiral.
It has been a few years since bio stocks gained sensation as biopharmaceuticals are widely considered one of the most promising next-generation cash cows.
But as the market is still in its infancy, it was not until recently that leading biotech firms here started generating profits. Despite weak earnings reports, investors here and abroad went on buying spree of local bio stocks on their massive growth prospect.
Uncertainties, however, also remained in place, as it was hard to predict when they would be able to reap stable revenues.
But starting this year, biotechnology firms started regaining massive spotlight amid the global spread of the coronavirus pandemic. With the virus-induced economic crisis freezing face-to-face business activities, investors started turning their eyes to non-facial sources of investment _ such as the stock market.
On top of that, the global virus shock came as a boon for bio firms, as expectations for their development of vaccines and anti-viral medications have driven up valuation of most market players.
“The global pharmaceutical market is expected to grow by 4.2 percent to $947.8 billion in 2020, compared to a year ago, despite the COVID-19 effect,” Daishin Securities analyst Hong Ka-hye said.
Market players will gain a new opportunity for growth due to hopes for development of COVID-19 vaccines and treatment, according to the analyst.
The upward momentum of local bio stocks is showing no signs of abating. On Tuesday, Celltrion, one of the biggest pharmaceutical firms in Korea along with Samsung BioLogics, topped the list of foreigners' preference, with overseas investors net purchasing its shares worth 117.7 billion won.
This enabled the company to set a new 52-week high in its stock price. Celltrion shares recovered to the 300,000-won mark for the first time in 21 months on the buying spree of foreign investors.
The stock price of Samsung BioLogics, the nation's largest bio firm by market capitalization, has doubled, compared with the price in the beginning of 2020.
Shares of the biopharmaceutical affiliate of Samsung Group closed at an all-time high of 819,000 won on Wednesday, up 17,000 won from a day ago.
Its shares have fluctuated just like other stocks for three years since it was listed on the nation's main bourse KOSPI on Nov. 10, 2016.
But starting this year, its corporate valuation has been on the steep rise with little fluctuation due to the coronavirus effect.
SK Biopharmaceuticals, scheduled to be listed on July 2, is also standing at the center of investors' attention on hopes for its rapid growth. The company has widely considered most sought-after stocks to be listed in 2020.