'Celltrion' Caught Between the Kakao Brothers

KakaoBank Drops to 10th in Market Cap, Pay Also Closing In

[Asia Economy Reporter Song Hwajeong] A competitive landscape is forming between Celltrion and the Kakao siblings over the 10th place in KOSPI market capitalization. Having lost the 10th spot to KakaoBank, Celltrion is now also at risk of being overtaken by KakaoPay.

According to the Korea Exchange on the 26th, KakaoPay surged 18% the previous day, climbing three spots from 15th to 12th in market capitalization. The market cap gap with 11th place Celltrion, which has been declining for three consecutive days, has narrowed to around 600 billion KRW.

Previously, on the 22nd, Celltrion lost the 10th place to KakaoBank. The market cap gap with KakaoBank has widened to over 3 trillion KRW. Celltrion is effectively trapped between the Kakao siblings.

Celltrion seemed to be rebounding sharply after the European approval of ‘Rekkirona’, but the rebound was dampened by accounting audit issues. On the other hand, KakaoBank and KakaoPay have recently shown strong stock performance due to inflows of foreign and institutional buying. Foreign investors have net purchased 49.5 billion KRW of KakaoPay and 28.7 billion KRW of KakaoBank this week. Institutions bought 81.2 billion KRW of KakaoPay and 42.3 billion KRW of KakaoBank. Until the previous day, foreign investors had net bought KakaoBank for 14 consecutive trading days, and institutions for 12 consecutive trading days. For KakaoPay, foreign investors bought for 4 consecutive days, and institutions for 10 consecutive days. In particular, KakaoPay appears to be attracting buying interest following its early inclusion in the KOSPI200 index. Kyungbeom Ko, a researcher at Yuanta Securities, said, "Although there were concerns about failing to be included due to the liquidity ratio issue related to Alipay shares, KakaoPay succeeded in special inclusion, and its inclusion weight is estimated to be around 0.7%. Foreign demand will likely concentrate on stocks including KakaoPay, which are expected to have high inclusion weights."

Celltrion, whose stock price had been sluggish this year due to underwhelming earnings, is expected to improve next year. Jaekyung Park, a researcher at Hana Financial Investment, said, "Celltrion’s consolidated sales and operating profit for next year are estimated at 2.3641 trillion KRW and 838.8 billion KRW, respectively, representing increases of 22% and 12.2% compared to the previous year. Sales growth is expected through the full-scale launch of Europe’s ‘Uplima’, growth of ‘Remsima SC’, and sales of COVID-19 diagnostic kits to the U.S. Department of Defense."