JPMorgan remains skeptical about Celltrion

JPMorgan's headquarters in New York. / AFP-Yonhap

By Park Jae-hyuk

JPMorgan has enraged Celltrion shareholders again with another report accentuating its negative outlook for Korea's leading pharmaceutical company.

Retail investors suspect JPMorgan is trying to pull down Celltrion's stock price to cover its losses from a massive amount of short selling before the financial authority imposed a temporary ban on the controversial investment method. Short selling is essentially a bet on a stock-price drop.

The U.S. investment bank identified Celltrion and Celltrion Healthcare as two of four stocks to avoid in its latest report that forecast the benchmark KOSPI index would hit 3,200 by the end of next year.

“We are cautious on stocks with overstretched valuations ― Celltrion and Celltrion Healthcare,” JPMorgan said in the report.

It set its target for Celltrion ordinary shares at 210,000 won and for Celltrion Healthcare at 78,000 won, almost half their current prices. After publication of the report, Tuesday, the stock prices of Celltrion affiliates dropped significantly. On Wednesday, Celltrion shares rose 1 percent to end at 353,000 won, while Celltrion Healthcare shares jumped 4.82 percent from the previous day's close to 150,000 won.

This is not the first time JPMorgan has issued a negative report on Celltrion this year. In September, JPMorgan analyst Cho Ji-hyun set the investment bank's share price target for Celltrion at 190,000 won and for Celltrion Healthcare at 70,000 won, warning investors against being too optimistic about the company's potential development of COVID-19 treatments.

At the time of the report's release, Celltrion held an emergency briefing for securities firm analysts here and rejected the report by claiming it defamed Celltrion Chairman Seo Jung-jin and the company. The pharmaceutical firm has yet to comment on the latest report.

In contrast to JPMorgan, local brokerages remained optimistic on the firm. According to online financial data tracker FnGuide, Korean securities firms set target prices for Celltrion shares at 371,000 won on average and for Celltrion Healthcare at 140,500 won.

Their views are attributed to the company's efforts to develop a COVID-19 treatment. Celltrion completed Phase 2 trials for its COVID-19 antibody treatment CT-P59 last month. It plans to ask the Ministry of Food and Drug Safety for conditional approval for use before the end of the year.