Celltrion (068270.KS) is expanding its shareholder return program with an additional share buyback worth 100 billion won ($72 million).
The company said its board approved the purchase of 560,853 shares on the 29th, valued at about 100 billion won based on the closing price the day before the resolution. The shares will be bought on the open market from the 30th through Dec. 29. Celltrion also repurchased 100 billion won worth of shares in August.
With the latest decision, the company's planned buybacks for this year rise to 2,135,262 shares, or 400 billion won. Celltrion said it moved to support the share price and enhance shareholder value, judging that the stock is undervalued relative to its intrinsic value and medium- to long-term growth potential.
Attention now turns to what the company will do with the repurchased shares. Celltrion plans to gather shareholder views at its annual general meeting in March next year before deciding whether to cancel the shares or expand cash dividends. It said it will compare the shareholder return effects of the two approaches based on full-year earnings and distributable profit, while also weighing market conditions.
The company has set a principle of returning one-third of consolidated net profit to shareholders over the medium to long term through share cancellations or cash dividends. It plans to adjust the mix of cancellations and dividends each year, taking into account earnings, free cash flow, the share price and investment plans for research and development and production facilities.
The additional buyback extends a shareholder return policy built on expanding global prescriptions and improving profitability. Celltrion is pushing to broaden prescriptions for existing and new products, including Zymfentra, in the U.S. and European markets while continuing to invest in research and development and production capacity.
"This additional buyback reflects confidence in the company's solid fundamentals and medium- to long-term growth," a Celltrion official said. "In line with our principle of returning one-third of consolidated net profit to shareholders, we will pursue a balance between growth investment and shareholder returns."
