Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<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

<ul>
<li>As <a href="https://www.smartkarma.com/entities/celltrion-inc-38a560c3-749f-4bd5-8671-c0df9cb659d7" target="_blank" data-smartkarma-citation="entities:26893:1" rel="noopener">Celltrion (068270 KP)</a> 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.</li>
<li>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.</li>
<li>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.</li>
</ul>


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.


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

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX Stocks as of Dec 22nd which has an aggregated short interest worth USD9.9bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Hanwha Solutions, Samsung Electron, Hyundai Motor.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of Dec 22nd which has an aggregated short interest worth USD9.9bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Hanwha Solutions, Samsung Electron, Hyundai Motor.


KRX Short Interest Weekly (Dec 22nd): Hanwha Solutions, Samsung Electron, Hyundai Motor

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>It was reported today that SK Pharmteco completed a 660 billion won in pre-IPO funding valuing the company at 4 trillion won.</li>
<li>Prior to this investment, SK Inc owned a 100% stake in SK Pharmteco. After this investment, it is estimated that SK Inc will own about 83.5% stake in SK Pharmteco. </li>
<li>Our base case valuation of SK Inc is NAV of 19.0 trillion won (NAV per share of 258,967 won), representing a 47% upside from current levels.</li>
</ul>


It was reported today that SK Pharmteco completed a 660 billion won in pre-IPO funding valuing the company at 4 trillion won.
Prior to this investment, SK Inc owned a 100% stake in SK Pharmteco. After this investment, it is estimated that SK Inc will own about 83.5% stake in SK Pharmteco. 
Our base case valuation of SK Inc is NAV of 19.0 trillion won (NAV per share of 258,967 won), representing a 47% upside from current levels.


Updated NAV on SK Inc Post 660 Billion Pre-IPO Investment in SK Pharmteco

<ul>
<li>We analyzed the changes in short interest of KRX Stocks as of Dec 15th which has an aggregated short interest worth USD10.4bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Hlb, Lg Electronics, Samsung C&amp;T, Samsung Electron, Posco Holdings I, Sk Hynix.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of Dec 15th which has an aggregated short interest worth USD10.4bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Hlb, Lg Electronics, Samsung C&amp;T, Samsung Electron, Posco Holdings I, Sk Hynix.


KRX Short Interest Weekly (Dec 15th): HLB, Lg Electronics, Samsung C&T, Samsung Electron

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): 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