Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>Celltrion Inc announced that its proposed merger with Celltrion Pharm has been cancelled due to disapproval of this deal among an overwhelming percentage of Celltrion Inc shareholders.</li>
<li>This cancellation of a merger between Celltrion Inc and Celltrion Pharm is likely to continue to have a positive impact on Celltrion Inc and negative impact on Celltrion Pharm.</li>
<li>The major reason is because Celltrion Pharm trades at high valuation multiples while Celltrion Inc trades at lower valuation multiples. Celltrion Pharm's P/B valuation is more than 3x Celltrion Inc's.</li>
</ul>


Celltrion Inc announced that its proposed merger with Celltrion Pharm has been cancelled due to disapproval of this deal among an overwhelming percentage of Celltrion Inc shareholders.
This cancellation of a merger between Celltrion Inc and Celltrion Pharm is likely to continue to have a positive impact on Celltrion Inc and negative impact on Celltrion Pharm.
The major reason is because Celltrion Pharm trades at high valuation multiples while Celltrion Inc trades at lower valuation multiples. Celltrion Pharm's P/B valuation is more than 3x Celltrion Inc's.


Merger Between Celltrion Inc and Celltrion Pharm Is Cancelled

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> posted revenue of KRW875B in 2Q24, driven by balanced growth in both the existing core and new biosimilar products.</li>
<li>Operating profit ‘temporarily’ declined 60% YoY due to the ongoing impact of the merger. However, operating profit improved by a massive 371% sequentially.</li>
<li>Celltrion maintains its 2024 revenue target of KRW3.5T (+60% YoY). The improvement in sales and operating profit in the second half of the year is expected to become increasingly evident.</li>
</ul>



Celltrion Inc (068270 KS) posted revenue of KRW875B in 2Q24, driven by balanced growth in both the existing core and new biosimilar products.
Operating profit ‘temporarily’ declined 60% YoY due to the ongoing impact of the merger. However, operating profit improved by a massive 371% sequentially.
Celltrion maintains its 2024 revenue target of KRW3.5T (+60% YoY). The improvement in sales and operating profit in the second half of the year is expected to become increasingly evident.


Celltrion (068270 KS): 2Q24 Result- Biosimilar Sales Roar; Operating Profit Recovers Sequentially

<ul>
<li>In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in May and June 2024.</li>
<li>On average, the share buyback announcements for the 13 companies that announced share buybacks in Korea represented 1.7% of outstanding shares.</li>
<li>Major companies that have announced share buybacks in Korea in the past two months include Celltrion Inc (068270 KS), SK IE Technology (361610 KS), and NCSOFT Corp (036570 KS).</li>
</ul>


In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in May and June 2024.
On average, the share buyback announcements for the 13 companies that announced share buybacks in Korea represented 1.7% of outstanding shares.
Major companies that have announced share buybacks in Korea in the past two months include Celltrion Inc (068270 KS), SK IE Technology (361610 KS), and NCSOFT Corp (036570 KS).


Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (May and June 2024)

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>The <a href="https://www.smartkarma.com/entities/samsung-kodex-top5plus-total-return-etf" target="_blank" data-smartkarma-citation="entities:36723:1" rel="noopener">Samsung KODEX Top5Plus Total Return ETF (315930 KS)</a> tracks the FnGuide Top 5 Plus Index and has an AUM of KRW 1,357bn (~US$1bn).</li>
<li>We currently see a high probability of <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> replacing <a href="https://www.smartkarma.com/entities/kt-g-corp" target="_blank" data-smartkarma-citation="entities:9320:1" rel="noopener">KT&amp;G Corporation (033780 KS)</a> in the index at the June rebalance.</li>
<li>There is between 1-2 days of ADV to trade on the potential add and delete and smaller flows on the other index members due to capping and funding changes.</li>
</ul>


The Samsung KODEX Top5Plus Total Return ETF (315930 KS) tracks the FnGuide Top 5 Plus Index and has an AUM of KRW 1,357bn (~US$1bn).
We currently see a high probability of Celltrion Inc (068270 KS) replacing KT&amp;G Corporation (033780 KS) in the index at the June rebalance.
There is between 1-2 days of ADV to trade on the potential add and delete and smaller flows on the other index members due to capping and funding changes.


FnGuide Top 5 Plus Index Rebalance Preview: Celltrion Could Replace KT&G

<ul>
<li>
<a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> posted revenue of KRW700B+ in 1Q24, thanks to increasing demand for Remsima in Europe. The market share of Remsima is approaching 80–90% in select European countries.</li>
<li>1Q24 profit setback is temporary as COGS ratio is expected to improve rapidly starting from 2Q24 as the inventory is digested, leading to sequentially improved profit margins in coming quarters.</li>
<li>With the successful U.S. launch of Zymfentra and continued solid uptake of the existing products, the company is well-positioned to meet its 2024 revenue target of KRW3.5T (+60% YoY).</li>
</ul>



Celltrion Inc (068270 KS) posted revenue of KRW700B+ in 1Q24, thanks to increasing demand for Remsima in Europe. The market share of Remsima is approaching 80–90% in select European countries.
1Q24 profit setback is temporary as COGS ratio is expected to improve rapidly starting from 2Q24 as the inventory is digested, leading to sequentially improved profit margins in coming quarters.
With the successful U.S. launch of Zymfentra and continued solid uptake of the existing products, the company is well-positioned to meet its 2024 revenue target of KRW3.5T (+60% YoY).


Celltrion (068270 KS): 1Q24 Result- Sales Hit Quarterly High; Profit Sinks on Merger Effect

South Korea

Celltrion, Inc. produces and sells biosimilar products, as well as consignment processing services for other businesses.

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Celltrion (068270 KP)

Merger Between Celltrion Inc and Celltrion Pharm Is Cancelled

Celltrion Inc announced that its proposed merger with Celltrion Pharm has been cancelled due to disapproval of this deal among an overwhelming...

Douglas Kim

Celltrion (068270 KS): 2Q24 Result- Biosimilar Sales Roar; Operating Profit Recovers Sequentially

Celltrion posted record high quarterly sales for the second consecutive quarter, with balanced growth in core and new biosimilar products....

Tina Banerjee

FnGuide Top 5 Plus Index Rebalance Preview: Celltrion Could Replace KT&G

Celltrion could replace KT&G in the FnGuide Top5 Plus Index in June. Passives will need to buy 1x ADV in Celltrion and sell 2x ADV in KT&G. There...

Brian Freitas

Celltrion (068270 KS): 1Q24 Result- Sales Hit Quarterly High; Profit Sinks on Merger Effect

Celltrion saw 23% sales growth in 1Q24 driven by Remsima in Europe. Profit is expected to improve in coming quarters as inventory is digested. The...

Tina Banerjee

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Merger Between Celltrion Inc and Celltrion Pharm Is Cancelled

Celltrion Inc announced that its proposed merger with Celltrion Pharm has been cancelled due to disapproval of this deal among an overwhelming...

Douglas Kim

Celltrion (068270 KS): 2Q24 Result- Biosimilar Sales Roar; Operating Profit Recovers Sequentially

​Celltrion posted record high quarterly sales for the second consecutive quarter, with balanced growth in core and new biosimilar products....

Tina Banerjee

Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (May and June 2024)

In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in May and...

Douglas Kim

FnGuide Top 5 Plus Index Rebalance Preview: Celltrion Could Replace KT&G

Celltrion could replace KT&G in the FnGuide Top5 Plus Index in June. Passives will need to buy 1x ADV in Celltrion and sell 2x ADV in KT&G. There...

Brian Freitas

Celltrion (068270 KS): 1Q24 Result- Sales Hit Quarterly High; Profit Sinks on Merger Effect

​Celltrion saw 23% sales growth in 1Q24 driven by Remsima in Europe. Profit is expected to improve in coming quarters as inventory is digested. The...

Tina Banerjee

Celltrion posted record high quarterly sales for the second consecutive quarter, with balanced growth in core and new biosimilar products....

Celltrion saw 23% sales growth in 1Q24 driven by Remsima in Europe. Profit is expected to improve in coming quarters as inventory is digested. The...