[Click eStock] Celltrion 4Q Operating Profit Up 185% YoY... High Growth Continues

2019 4Q Operating Profit 125.4 Billion KRW... 185% Increase YoY
Production Capacity Doubled Compared to Last Year... High Growth Expected to Continue This Year

[Asia Economy Reporter Minwoo Lee] Celltrion is expected to record an operating profit in the fourth quarter of last year that is 185% higher than the same period the previous year. It is forecasted to continue high growth this year through increased factory utilization rates and expanded market share of Truxima in the U.S. market.

On the 21st, Hana Financial Investment estimated that Celltrion would achieve sales of 341.1 billion KRW and an operating profit of 125.4 billion KRW in the fourth quarter of last year, representing increases of 41% and 185% respectively compared to the same period the previous year. The scale of biosimilars and antibody drugs supplied to Celltrion Healthcare at the end of last year was 32.7 billion KRW and 183.8 billion KRW respectively, marking the largest quarterly volume. Additionally, out of the 87.6 billion KRW worth of contract manufacturing organization (CMO) production for Teva’s Azvi, 64.5 billion KRW occurred in the fourth quarter, contributing to the strong performance.

High growth is expected to continue this year as supply capacity has significantly increased. Celltrion has already started producing and supplying 'Remsima SC' and Truxima from the first plant, which was expanded by 50,000 liters, since the end of last year. Remsima IV is produced at Lonza’s contract manufacturing plant and supplied to Celltrion Healthcare after six quarters. As a result, Celltrion has secured a total production capacity of 270,000 liters, including 50,000 liters at the first plant, an additional 50,000 liters from the first plant expansion, 90,000 liters at the second plant, and 80,000 liters from Lonza’s contract manufacturing. This is nearly double the previous capacity of 140,000 liters.

However, since these high growth expectations are already reflected in the stock price, additional drivers are needed for further increases. Minjung Seon, a researcher at Hana Financial Investment, stated, "The speed of Truxima’s market share expansion in the U.S. and the sales volume of Remsima SC in Europe are key factors." She added, "The monthly prescription amount of Truxima, which has been sold in the U.S. since November last year, and the sales growth of Remsima SC by Celltrion Healthcare will be indicators to gauge the growth of the Celltrion group this year."

Meanwhile, Hana Financial Investment has given Celltrion a 'Buy' rating with a target price of 233,000 KRW. The closing price the previous day was 172,500 KRW.