Korea / Special Situations, Clepsydra Capital

Sanghyun Park

I investigate special situations in Korea.

Korea / Special Situations

Close Long/Short on Celltrion/Celltrion Healthcare: Market Mood on Placement Is Surprisingly Mild

Celltrion: Understanding Inflectra's U.S. Challenges

Celltrion Inc Placement - Shorter Lockup Period Will Be an Overhang for Share Price

Celltrion (068270): Time Is Not Right for Short Sellers Yet

Celltrion Healthcare Placement: Weigh Down from FDA Uncertainty and Placement Overhang

Another Negative Sign for Celltrion: Remsima Retail Price Is Falling Too Fast Too Much

Event-Driven

<ul>
<li>It is quite clear that <a href="https://www.smartkarma.com/entities/23641" target="_blank" data-smartkarma-citation="entities:23641:1">Celltrion Healthcare (091990 KS)</a> didn't do well in the previous placement (by Temasek) back on Mar 6. The price plunged 11.89% the following day (Mar 7) after Temasek sold 2.9M shares in block deals. Not surprisingly, <a href="https://www.smartkarma.com/entities/991" target="_blank" data-smartkarma-citation="entities:991:1">Celltrion Inc (068270 KS)</a> also took a harsh hit on Mar 7 as a result of Temasek's Mar 6 Healthcare selldown. The price fell 12.16% on Mar 7.</li>
<li>But THIS TIME, we have two things that may mitigate the immediate impact of this placement on the prices of the Celltrion duo. After the market closed today, the local news outlet called 'Seoul Economic Daily' reported an <a href="http://www.sedaily.com/NewsView/1S4OOK86D7" target="_blank">exclusive report</a> about Celltrion confirming the construction of its third CMO plant in Singapore, which is believed to be assisted by Temasek. The other one is the US FDA warning letter. Early this morning (Sep 18), Celltrion <a href="http://news.mk.co.kr/newsRead.php?no=587416&amp;year=2018" target="_blank">publicly said</a> that it had received the EIR (Establishment Inspection Report) from the US FDA on Sep 17, and this EIR states that Celltrion's manufacturing process does not have any non-compliance issue.</li>
</ul><ul><li>So, we will face a more complex situation. Both Celltrion Healthcare and Celltrion will take a hit tomorrow, but I don't think it will be as harsh as last time (Mar 7). Then, we need a hedge. So, I'd short <a href="https://www.smartkarma.com/entities/23641" target="_blank" data-smartkarma-citation="entities:23641:1">Celltrion Healthcare (091990 KS)</a> and long <a href="https://www.smartkarma.com/entities/991" target="_blank" data-smartkarma-citation="entities:991:1">Celltrion Inc (068270 KS)</a> as early as tomorrow morning because the above mentioned two mitigating factors may affect Celltrion more directly.</li></ul>


It is quite clear that Celltrion Healthcare (091990 KS) didn't do well in the previous placement (by Temasek) back on Mar 6. The price plunged 11.89% the following day (Mar 7) after Temasek sold 2.9M shares in block deals. Not surprisingly, Celltrion Inc (068270 KS) also took a harsh hit on Mar 7 as a result of Temasek's Mar 6 Healthcare selldown. The price fell 12.16% on Mar 7.
But THIS TIME, we have two things that may mitigate the immediate impact of this placement on the prices of the Celltrion duo. After the market closed today, the local news outlet called 'Seoul Economic Daily' reported an exclusive report about Celltrion confirming the construction of its third CMO plant in Singapore, which is believed to be assisted by Temasek. The other one is the US FDA warning letter. Early this morning (Sep 18), Celltrion publicly said that it had received the EIR (Establishment Inspection Report) from the US FDA on Sep 17, and this EIR states that Celltrion's manufacturing process does not have any non-compliance issue.
So, we will face a more complex situation. Both Celltrion Healthcare and Celltrion will take a hit tomorrow, but I don't think it will be as harsh as last time (Mar 7). Then, we need a hedge. So, I'd short Celltrion Healthcare (091990 KS) and long Celltrion Inc (068270 KS) as early as tomorrow morning because the above mentioned two mitigating factors may affect Celltrion more directly.

セルトリオン・ヘルスケアの配置：2つの緩和要因、ヘルスケアは短期、セルトリオンは長期