Celltrion’s stock price is falling sharply due to overlapping negative factors, such as the controversy over the financial authorities’ discussion of sanctions against fraudulent accounting, and a mismatch between the emergency response committee and minority shareholders ahead of the merger of the three group companies.
As of 10:54 am on the 23rd, Celltrion was trading at 210,000 won, down 6.67% (15,000 won) from the previous day. As of 9:58 on the same day, institutions and foreigners sold Celltrion KRW 5.4 billion and KRW 800 million, respectively.
On the same day, the Hankyoreh reported that, in an article titled, ‘Finance authorities begin discussing sanctions against Celltrion after three years of investigation into accounting fraud’, “The Celltrion Group’s accounting fraud controversy has been brought to the judgment seat of the financial authorities for the first time in three years as the Supervision Committee begins deliberation.”
Celltrion’s affiliate Celltrion Healthcare purchases a large amount of a biosimilar drug ‘biosimilar’ made by Celltrion, accumulates hundreds of billions of won in inventory, and sells them back to overseas retailers. The key agenda for this supervision is the view that it may have caused fake sales or inflated profits in the course of transactions between affiliates.
Regarding the discussion of Celltrion’s sanctions, the Hankyoreh said, △ Whether Celltrion Healthcare fully reflected the decline in the value of medicines (inventory assets) purchased from Celltrion, and △ Recognizing the sales of medicines sold to Celltrion’s affiliates Celltrion Healthcare and Celltrion Pharmaceuticals as sales. Whether it is appropriate △ He emphasized as a key issue that it is unusual for the supervision to take three years.
In response, the Financial Services Commission and the Financial Supervisory Service said, “The supervision and handling procedures for related matters are currently in progress, and some contents are not true, and nothing has been confirmed as to whether or not to take action or the details of the action.”
However, Celltrion’s share price has already been hit hard. The Celltrion Minority Shareholder Emergency Response Committee claimed that the report was intended to deliberately lower the share price of Celltrion.
As a result of the eToday coverage, an official from Celltrion minority shareholder non-captain said, “We requested an active response from Celltrion regarding the article. “He said. He added, “Today, we will also report to the SNU Fact Check Center, the Institute for Media Information at Seoul National University.”
Prior to the merger of the three Celltrion companies, a non-captain group was formed on October 5 to ‘collect 50 million shares’, but some shareholders are demanding the dissolution of the company.
At the time of the launch of the non-captain, Celltrion shareholders showed great response by delegating 6 million shares in one day. In addition, 93.2% of the 1,650 people who participated in the non-captain confidence vote held this month agreed on the direction of the non-captain’s activities, giving strength.
However, in recent years, the number of shareholders who oppose non-substitution is rapidly increasing. The main reason is that the non-captain is neglecting the communication of shareholders and rather, it has become the company’s IR and marketing team, representing the company’s position. Shareholders who resisted the subrogation are demanding a refund of the activity expenses.
Recently, a brokerage firm that lowered the target price of Celltrion also appeared.
Byung-yong Oh, a researcher at Hanyang Securities, said, “Celltrion is continuing its low growth rate for three consecutive quarters compared to last year due to the slowing growth rate of Truxima for the US, sluggish sales of Lekkorina, and delayed sales of new products. There was no sales of Remsima SC, and there was also no CMO sales to TEVA, which occurred a lot in the past three or four quarters.”
Researcher Oh said, “In the fourth quarter, we expect better results than the third quarter due to the increase in sales plans for Remsima SC and U-Plyma. do,” he added.
According to FnGuide, a financial information provider, Celltrion’s EPS recorded 1,406 won in the first quarter, 910 won in the second quarter, and 982 won in the third quarter. In particular, the fourth quarter is expected to be 1213 won, which is about 3.5 times lower than the 4517 won as of the end of December last year.
Kim Hyung-soo, a researcher at Hanwha Investment & Securities, said, “The European product approval of the antibody drug developed by Celltrion has gained significance as a global new drug, but the marketability is judged to be limited as it is preparing for approval for an oral treatment.”
Celltrion’s price cash-flow ratio (PCR) is also expected to weaken YoY. As of December this year, Celltrion’s expected PCR is expected to drop 51.2 percentage points from December last year (88.25%) to 37.05%.
PCR is an indicator of how the current stock price is evaluated in relation to the company’s funding ability or operating performance. The lower the number, the cheaper the stock price relative to cash flow.