DB Securities on the 17th said Celltrion is pursuing the most shareholder-friendly policies within the pharmaceuticals and biotech sector. It maintained a "Buy" rating and raised its target price to 290,000 won. Celltrion's previous day's closing price was 200,000 won.
Since 2023, Celltrion has implemented shareholder-friendly policies by buying back and canceling more than 1 trillion won of its own shares every year.
Lee Myung-seon, an analyst at DB Securities, said, "This year, by proactively reflecting the intent of the Commercial Act amendment, the company decided to cancel 9.11 million treasury shares," adding, "This amounts to 1.9268 trillion won, the largest in the pharmaceuticals and biotech sector."
Celltrion held a total of 12.34 million treasury shares, and to secure future growth engines, it plans to cancel all but 3.23 million shares—representing 35% of the total treasury shares. It also decided at the shareholders meeting to pay a cash dividend of 750 won per share.
Strong results are also expected this year. DB Securities forecast Celltrion's sales this year at 5.2281 trillion won and operating profit at 1.6573 trillion won.
The analyst explained, "This year's results are also expected to show a weak-first-half, strong-second-half pattern, and annual contract manufacturing (CMO) sales of 350 billion won will be recognized each quarter."
The Branchburg, United States, plant is scheduled to begin operations in Feb. From the second quarter, pharmaceutical supply sales totaling 680 billion won over the next three years are expected.
The analyst said, "Since the second half of last year, improvement in the cost of goods sold ratio driven by rising sales of high-margin new products has heightened expectations for earnings improvement this year," adding, "Moreover, growth is expected even after the U.S. plant acquisition, without any damage to operating profit."