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 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

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>In a recent discussion with a client, one of the questions that was raised was regarding the impact the local investors are having on the corporate governance reforms in Korea.</li>
<li>The number of local investors in the Korean stock market has jumped in the past few years from 5.3 million in 2017 to 14.4 million in 2022.</li>
<li>All in all, I think Korea is about 3-5 years behind Japan in various corporate governance reforms. So it has a lot of catching up to do.</li>
</ul>


In a recent discussion with a client, one of the questions that was raised was regarding the impact the local investors are having on the corporate governance reforms in Korea.
The number of local investors in the Korean stock market has jumped in the past few years from 5.3 million in 2017 to 14.4 million in 2022.
All in all, I think Korea is about 3-5 years behind Japan in various corporate governance reforms. So it has a lot of catching up to do.


Locals Driving Corporate Reforms and 10 Korean Companies Recently Announcing Share Cancellations

<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> has reported 12% YoY growth in its core business of biosimilars in 2023. Growth was mainly driven by new portfolios including Remsima SC and Yuflyma.</li>
<li>Operating profit and operating margin improved slightly YoY, led by an increase in high-margin biosimilar sales. Biosimilar products contributed 67% of total revenue in 2023, up from 57% in 2022.   </li>
<li>The company is targeting more than 60% global sales growth to KRW3.5 trillion in 2024. Celltrion is eyeing KRW1.6 trillion EBITDA and more than 40% EBITDA margin in 2024.</li>
</ul>



Celltrion Inc (068270 KS) has reported 12% YoY growth in its core business of biosimilars in 2023. Growth was mainly driven by new portfolios including Remsima SC and Yuflyma.
Operating profit and operating margin improved slightly YoY, led by an increase in high-margin biosimilar sales. Biosimilar products contributed 67% of total revenue in 2023, up from 57% in 2022.   
The company is targeting more than 60% global sales growth to KRW3.5 trillion in 2024. Celltrion is eyeing KRW1.6 trillion EBITDA and more than 40% EBITDA margin in 2024.


Celltrion (068270 KS): Solid Performance in Core Business in 2023; Eyes 60% Sales Growth in 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-fn-top10-equal-weight-etf" target="_blank" data-smartkarma-citation="entities:40203:1" rel="noopener">Samsung KODEX Fn Top10 Equal Weight ETF (395170 KS)</a> tracks the FnGuide Top 10 Equal Weight Index and has an AUM of US$241m.</li>
<li>We expect <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> will replace <a href="https://www.smartkarma.com/entities/samsung-sdi-co-ltd" target="_blank" data-smartkarma-citation="entities:503:1" rel="noopener">Samsung SDI (006400 KS)</a> in the index at the March rebalance.</li>
<li>There will be 0.26x ADV to buy in <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> while passives will need to sell 0.17x ADV of <a href="https://www.smartkarma.com/entities/samsung-sdi-co-ltd" target="_blank" data-smartkarma-citation="entities:503:1" rel="noopener">Samsung SDI (006400 KS)</a>. </li>
</ul>


The Samsung KODEX Fn Top10 Equal Weight ETF (395170 KS) tracks the FnGuide Top 10 Equal Weight Index and has an AUM of US$241m.
We expect Celltrion Inc (068270 KS) will replace Samsung SDI (006400 KS) in the index at the March rebalance.
There will be 0.26x ADV to buy in Celltrion Inc (068270 KS) while passives will need to sell 0.17x ADV of Samsung SDI (006400 KS). 


FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI

<ul>
<li>In 3Q23, <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> reported revenue and operating profit of KRW672B (+4% YoY) and KRW268B (+25% YoY), respectively, driven by broad-based growth across biosimilar portfolio and CMO revenue.</li>
<li>Operating profit margin is approaching 40% level, highest level in last two years, driven primarily by sales growth around high margin products. Net profit jumped 33% YoY to KRW221B.</li>
<li>In Oct’23, Celltrion received FDA approval for Zympentra, which is Celltrion's first product approved as a new drug in the U.S., and is expected to receive patent protection until 2040.</li>
</ul>


In 3Q23, Celltrion Inc (068270 KS) reported revenue and operating profit of KRW672B (+4% YoY) and KRW268B (+25% YoY), respectively, driven by broad-based growth across biosimilar portfolio and CMO revenue.
Operating profit margin is approaching 40% level, highest level in last two years, driven primarily by sales growth around high margin products. Net profit jumped 33% YoY to KRW221B.
In Oct’23, Celltrion received FDA approval for Zympentra, which is Celltrion's first product approved as a new drug in the U.S., and is expected to receive patent protection until 2040.


Celltrion (068270 KS): Record High Revenue and Operating Profit in 3Q23 Solidify Merger Stance

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)

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 (068270 KS): Solid Performance in Core Business in 2023; Eyes 60% Sales Growth in 2024

Celltrion will cancel 1.1M shares (~10% of holdings) for ~KRW200B. Parallelly, the company announced buyback of 436K shares for ~KRW75B, matching...

Tina Banerjee

FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI

Celltrion could replace Samsung SDI in the FnGuide Top10 Equal Weight index at the March rebalance. There could be a second change depending on...

Brian Freitas

Celltrion (068270 KS): Record High Revenue and Operating Profit in 3Q23 Solidify Merger Stance

Celltrion Board approved the merger with Celltrion Healthcare. The scheduled date of listing of the new shares is January 12. The merged entity...

Tina Banerjee

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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

Locals Driving Corporate Reforms and 10 Korean Companies Recently Announcing Share Cancellations

On 17 April, Celltrion Inc announced that it will buyback shares worth 75 billion won. Including 75 billion won of share repurchase last month,...

Douglas Kim

Celltrion (068270 KS): Solid Performance in Core Business in 2023; Eyes 60% Sales Growth in 2024

Celltrion will cancel 1.1M shares (~10% of holdings) for ~KRW200B. Parallelly, the company announced buyback of 436K shares for ~KRW75B, matching...

Tina Banerjee

FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI

Celltrion could replace Samsung SDI in the FnGuide Top10 Equal Weight index at the March rebalance. There could be a second change depending on...

Brian Freitas

Celltrion (068270 KS): Record High Revenue and Operating Profit in 3Q23 Solidify Merger Stance

Celltrion Board approved the merger with Celltrion Healthcare. The scheduled date of listing of the new shares is January 12. The merged entity...

Tina Banerjee

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...