Celltrion strives to boost stock price

Celltrion's Plant 1 in Incheon / Courtesy of Celltrion

Korean biotech firm Celltrion is striving to pump up its stock price through a series of stock buyback programs and other measures to improve shareholder value in an effort to dispel shareholder concerns over the company’s profitability and impacts from U.S. tariffs.

Celltrion said Tuesday it has repurchased its own shares through six rounds of stock buyback programs so far this year, totaling 550 billion won ($402.75 million). The amount surpassed the 436 billion won of total buybacks it carried out last year.

Celltrion Group Chairman Seo Jung-jin, the group's holding company Celltrion Holdings and its affiliate Celltrion Skincure recently announced plans to purchase Celltrion shares worth 50 billion won, 100 billion won and 50 billion won, respectively.

Alongside Seo, other executives are also purchasing company shares to help boost the stock price. On Monday, Celltrion CEO Seo Jin-seok, the chairman’s eldest son, reported the purchase of 2,610 shares worth 400 million won. Kee Woo-sung and Kim Hyoung-ki, both vice chairmen, also reported buying 2,604 shares each.

Since January, the company has either completed or decided to cancel treasury shares worth approximately 900 billion won, which is higher than the 700 billion won it canceled throughout all of 2024.

On Monday, the company also announced a bonus issue, granting 0.04 new shares for each common share held as part of its efforts to enhance shareholder value. Through the bonus issue, shareholders can expect an effective stock dividend of about 4 percent, the company said.

Celltrion’s aggressive approach is based on its belief that the market is undervaluing the company despite its confidence in profitability.

Celltrion traded at 180,300 won on Jan. 2 and remained in the 180,000 to 190,000 won range until late March. However, the stock began to weaken in April and has been stuck in the 150,000 won range throughout this month, hitting a 52-week low of 150,400 won during trading Monday.

Celltrion Chairman Seo Jung-jin speaks during an online press conference on May 12. Captured from Celltrion's live stream

The weakening stock price is interpreted as market’s reaction to the company’s first-quarter earnings.

In the first quarter, Celltrion posted 841.9 billion won in sales, up 14.2 percent year-on-year, and 149.4 billion won in operating profit, up 870 percent from a year earlier. While the figures showed a notable improvement compared to last year, brokerages placed greater emphasis on the fact that the results fell short of their expectations.

“Celltrion’s stock declined to advance due to concerns over U.S. tariffs on pharmaceutical products and weaker-than-expected first-quarter earnings,” NH Investment & Securities analyst Han Seung-yeon said.

“However, the company is still expected to see strong growth in 2025, with projected sales of 4.3 trillion won, up 21 percent year-on-year, and operating profit of 1.04 trillion won. … We can expect a gradual recovery in its valuation as quarterly earnings growth continues throughout the year.”

Celltrion also expressed confidence in its growth momentum.

While announcing the bonus issue Monday, the company said the decision "came after a comprehensive consideration of the company’s confidence in its fundamental value and growth potential, as well as the current undervaluation.”

“If this undervaluation continues, it will consider additional share buybacks and other shareholder-friendly measures to enhance corporate value.”

During a March 15 online press conference, Chairman Seo stressed that the U.S. Donald Trump administration’s push for drug price cuts and tariffs would pose little risk to Celltrion, saying there will be “no problem for Celltrion to achieve its 5 trillion won revenue guidance this year.”

“The fact that the chairman is speaking out this directly shows our confidence,” Seo said. “The current stock price is at a good level for investment. We’ve pledged to use one-third of our earnings before interest, taxes, depreciation and amortization to enhance shareholder value, and I’m willing to go beyond that, which is why I believe the stock is worth investing in at this point.”