Celltrion (068270 KP): Improving Base Business Is Being Overlooked by Mr. Market Amid Merger Noises

802 Views26 Sep 2023 18:26

Boomeranged on Fri, 29 Dec 2023 13:59

Celltrion Board approved the merger with Celltrion Healthcare. The scheduled date of listing of the new shares is January 12. The merged entity will be placed among the top 10 in KOSPI in terms of market capitalization. The merged entity targets revenue of KRW12 trillion ($9 billion) by 2030. Celltrion's product portfolio is expected to expand to 22 biosimilar products by 2030 from six now.

SUMMARY

As Celltrion (068270 KP) approaches merger clarity, focus will shift to its base business, which remains solid. In Q2 2023, biosimilar, the flagship business, reported a 10% YoY growth.
Operating profit margin expanded 440bps YoY to 34.9%. Margins are expected to improve further through increasing contribution from high-margin products such as Yuflyma (Humira biosimilar) and Remsima SC.
Celltrion expects to receive approval for Remsima SC in the U.S. by end of October, which should act as a major catalyst. By 2030, merged entity targets revenue of KRW12T.

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