Domestic pharmaceutical companies and biotech corporations are expanding dividends ahead of March shareholder meetings. As major corporations' earnings improve, shareholder expectations are rising and the size of dividends is growing. The government's emphasis on shareholder returns is also affecting dividends.
According to the Financial Supervisory Service's electronic disclosure system on the 23rd, among pharmaceutical companies and biotech corporations with more than 1 trillion won in sales last year, Yuhan, GC Pharma, and Celltrion will pay dividends. These corporations posted record results and are returning profits to shareholders.
◇ Yuhan's total dividends 44.9 billion won… Celltrion's dividend size is the largest ever
Yuhan set dividends at 600 won per common share and 620 won per preferred share. The dividends increased 20% each from last year. The total dividend amount is 44.9 billion won. Yuhan plans to pay dividends to shareholders after the shareholder meeting next month. Yuhan posted record results last year as it received Leclaza license fees in China and prescriptions for prescription drugs increased. Yuhan's consolidated sales last year were 2.1866 trillion won and operating profit was 104.4 billion won. They rose 6% and 90%, respectively, from the previous year.
GC Pharma will pay dividends of 1,500 won per common share, the same as last year. The total dividend amount is 17.1 billion won. GG GC Pharma recorded consolidated sales of 1.9913 trillion won and operating profit of 69.1 billion won last year. They increased 19% and 115%, respectively, from the previous year. U.S. sales of the blood product Aliglo exceeded 150 billion won, and the Hunter syndrome treatment Hunterase also performed well.
Celltrion will pay a cash dividend of 750 won per common share. Total dividends are 164 billion won. Celltrion is pursuing a capital reduction dividend classified as a tax-exempt dividend. Ordinary dividends are subject to dividend income tax. However, if a capital reduction dividend is paid by drawing down capital reserves, individual shareholders do not have to bear dividend income tax.
Celltrion posted consolidated sales of 4.1625 trillion won and operating profit of 1.1685 trillion won last year. They increased 17% and 138%, respectively, from the previous year. The company said it decided to pay cash dividends at a record level to return value to shareholders while simultaneously making large-scale investments such as acquiring U.S. production facilities. A Celltrion official said, "If the agenda is finalized at the shareholder meeting next month, dividend payments will proceed."
◇ Ildong Pharmaceutical canceled dividends after stopping Belviq sales… dividends for the first time in 7 years
JW Pharmaceutical will pay 500 won per common share and 525 won per preferred share this time. Each increased 11% from last year. JW Life Science will pay 525 won per common share. JW Pharmaceutical recorded strong results as prescriptions for the dyslipidemia (hyperlipidemia) treatment Livalo increased. Last year's consolidated sales and operating profit were 774.8 billion won and 93.6 billion won, respectively. They increased 8% and 14% from the previous year.
Ildong Pharmaceutical will pay dividends of 200 won per common share for the first time in 7 years since 2019. Ildong Pharmaceutical's consolidated sales last year were tentatively tallied at 566.9 billion won, with operating profit at 19.5 billion won. Sales fell 8% from the previous year, but operating profit rose 49%.
Ildong Pharmaceutical canceled its cash dividend decision in 2020 due to the suspension of sales of the appetite suppressant Belviq. There were no dividends afterward, and the company is resuming dividends this time. When the U.S. Food and Drug Administration (FDA) noted that patients taking Belviq had a higher cancer incidence rate at the time, Ildong Pharmaceutical recalled the product. However, Ildong Holdoings paid 100 won per common share in 2024 and will pay the same amount this time.
Myung In Pharm, which listed on the KOSPI last year, will pay 1,500 won per common share this time. As of the end of the third quarter last year, special related parties, including founder Lee Haeng-myeong's family and executives, held 73.8% equity. The dividend amount to be received by the founder's family (69.7% equity) is estimated to exceed 15 billion won this time. In addition, Dongkook Pharmaceutical, Huons, Huons Global, and HuM&C will pay 200 won per common share. Samjin Pharmaceutical's dividend is 800 won per share.
Among biotech corporations, Alteogen will pay its first dividend since its founding. Alteogen will pay 371 won per common and preferred share. The total dividend amount is 20 billion won. PharmaResearch, which introduced the aesthetic device "Rejuran," will pay 3,700 won per common and preferred share, respectively.
◇ Inducing long-term investment with dividends… companies need to raise corporate value through research and development
Corporations can encourage shareholders' long-term investment by returning accumulated profits as dividends. From a shareholder's perspective, instead of short-term trades seeking capital gains, they can hold shares for the long haul and help activate the stock price.
Government shareholder-friendly policies, such as separate taxation of dividend income, also influence dividend expansion. Separate taxation of dividend income means levying taxes by separating dividend income from other income instead of combining them. If interest and earned income are all added together to levy taxes, a higher tax rate applies, but separate taxation has the effect of applying a lower rate.
Kwon Hae-soon, an analyst at Eugene Investment & Securities, said, "The results of pharmaceutical and biotech corporations expanding overseas appear to be reflected in dividends," adding, "In addition to dividends, raising corporate value through research and development investment to give shareholders a chance to realize gains could also be an option."