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Growing alongside the RNA therapeutics market

Maintain Buy and TP of W200,000

We maintain our Buy rating and target price of W200,000 for ST Pharm. For 2026, we forecast revenue at W413.1bn (+24.5% YoY) and operating profit at W94.2bn (+71.4% YoY). Revenue growth is likely to be driven by new approvals and indication expansions for RNA therapeutics. Notably, results from two phase 3 trials tied to existing customers’ chronic disease and oncology programs are expected in 2H26. As such, we expect revenue growth to accelerate from 2026?27. From 2027, the firm is likely to enter a more stable earnings phase, with annual OP margins of 20% or higher.

We also expect earnings seasonality to ease from 2026. Historically, ST Pharm’s revenue has been concentrated in the fourth quarter. However, as the number of commercialized oligo CDMO products increases and new projects continue to be added, quarterly revenue volatility is likely to ease gradually.

The growing number of blockbuster RNA therapeutics and the expanding pipeline of early-stage RNA therapeutic assets could provide additional order momentum. Indeed, as sales of already-commercialized RNA drugs continue to grow, capacity constraints at incumbent CDMOs could prompt companies to place orders with new CDMO partners.

In addition, amid an acceleration in RNA therapeutic development activity, ST Pharm added six new projects in 4Q25 and four in 1Q26. As the pool of RNA therapeutics companies continues to expand, we expect ST Pharm to see share price momentum from new customer wins and additional orders for products with blockbuster potential.

1Q26 review: Earnings surprise

For 1Q26, ST Pharm posted revenue of W67bn (+27.8% YoY) and operating profit of W11.5bn (+1,021.8% YoY). Despite the first quarter being a traditionally slow season, the company delivered a positive earnings surprise on favorable mix and FX effects.

Meanwhile, approximately W15bn in revenue originally expected in 1Q26 was deferred and is now expected to be recognized in 2Q26. As a result, 2Q26 earnings should improve QoQ. This year, we expect quarterly revenue to be highest in 4Q, followed by 2Q, 3Q, and 1Q.

In 1Q26, oligo CDMO revenue came in at W40.4bn, accounting for 60.3% of overall revenue and driving both top- and bottom-line growth. High-margin commercialized products, including hematologic cancer treatments, supported profitability improvement, with commercial-stage oligo projects accounting for 67.1% of oligo CDMO revenue.