Celltrion companies become No. 5 chaebol in Korea

By Nam Hyun-woo

The combined market cap of Celltrion units on the Kosdaq market topped those of renowned conglomerates such as POSCO, Lotte and CJ, buoyed by its recently announced initiatives and the government’s plans to boost the tech-heavy bourse.

According to Chaebul.com, a conglomerate information provider, Monday, the combined market cap of Celltrion, Celltrion Healthcare and Celltrion Pharm stood at 65.21 trillion won ($61.23 billion) at the close of Friday’s session.

Celltrion logged a market cap of 41.89 trillion won, while Celltrion Healthcare and Celltrion Pharm posted 20.34 trillion won and 2.98 trillion won, respectively.

The numbers came after all of their stock prices hit new highs on Friday -- Celltrion at 341,500 won; Celltrion Healthcare, 148,100 won; and Celltrion Pharm, 89,500 won.

With these numbers, the Celltrion Group became the fifth-largest conglomerate in Korea by market cap, following Samsung Group with 468.74 trillion won, SK Group with 123.64 trillion won, LG Group with 106.6 trillion won and Hyundai Motor Group with 93.86 trillion won.

Below Celltrion Group were well-known giants such as POSCO Group with 40.64 trillion won, Lotte Group with 30.48 trillion won and CJ Group with 22.94 trillion won.

Earlier this month, Celltrion alone already surpassed Hyundai Motor to become the third-largest cap in the country’s stock markets -- both the main KOSPI and secondary Kosdaq. Only Samsung Electronics and SK hynix are larger than Celltrion.

Celltrion companies were sitting on an uptrend throughout last week, amid the group’s announcements about its future initiatives at the J.P. Morgan conference that was held from Jan. 8 to 11 in California.

During the conference, Celltrion Chairman Seo Jung-jin announced that Celltrion will triple the capacity of its planned third plant, raising it from the initially announced 120,000 liters to 360,000 liters.

Seo said Celltrion will finish selecting the location for the third plant during the first half of this year, with a plan of building it outside of Korea and completing it by 2021.

Celltrion has two plants in Incheon each has 50,000 and 90,000 liters capacity, with the first plant currently under expansion from 50,000 liters to 100,000 liters. Once the third plant is completed, Celltrion will lead other global players in capacity such as Samsung BioLogics with 364,000 liters, Boehringer Ingelheim with 330,000 liters and Lonza with 280,000 liters.

With the expansion, Celltrion is considering halving the price of its biosimilar Remsima so that the drug can raise its market share, Seo said, adding that the company will continue investing in research and development.

Another boost that jacked up Celltrion companies’ price was the government’s package of plans to nurture the Kosdaq market.

In the pack, the government and the Korea Exchange said it will offer tax breaks for Kosdaq investors, ease requirements for listing on the market, and encourage public pension funds to invest in listed firms by introducing the “KRX 300” index, an integrated index of the KOSPI and the Kosdaq.

Analysts said that the pack improved investor sentiment on the Kosdaq market, which is largely led by bio firms. Even though Celltrion is expected to transfer to the KOSPI next month, such momentum will continue to raise bio caps in the market. After Celltrion’s transfer, Celltrion Healthcare will become the kingpin of the Kosdaq.

“The Kosdaq has been largely swayed by Celltrion, with its price movement affecting the entire market,” KB Securities analyst Kim Min-gyu said. Celltrion’s transfer to the KOSPI will highlight the attractiveness of the Kosdaq, if the growth momentum of the market stays the same and its valuation becomes cheaper.”