[Click eStock] "Celltrion Target Price Raised to 240,000 Won"

Daishin Securities raised the target price of Celltrion to 240,000 KRW on the 15th while maintaining a buy rating. The target price was calculated using the SOTP (Sum of the Parts) valuation method. The operating value was estimated at 48.9 trillion KRW by discounting the 2026 EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), reflecting normalized cost ratios after the merger and an increased sales proportion of new products launched in the US. Adding the non-operating value of Celltrion Pharm’s equity value of 2.1 trillion KRW, the total enterprise value was calculated at 51.5 trillion KRW.

Lee Hee-young, a researcher at Daishin Securities, said, "From this year, the market share expansion and sales growth of biosimilars launched in the US (Jimpentra, Uplima) will be in full swing," adding, "Additional new product launches such as Stelara bs, Xolair bs, and Eylea bs are scheduled from next year. We expect an increase in corporate value due to new product launches and expanded product sales."

Consolidated sales for Q1 are expected to be 745.4 billion KRW, operating profit 7.5 billion KRW, and OPM (Operating Profit Margin) 1%, in line with consensus. In the first half of the year, operating profit is expected to deteriorate due to quarterly PPA (Purchase Price Allocation) amortization expenses related to distribution rights arising after the merger, amounting to 70 billion KRW per quarter. From the second half, the PPA amortization expense is expected to decrease to 7 billion KRW per quarter, and the cost of sales ratio is expected to be lower than in the first half, leading to a significant improvement in profitability.

Celltrion’s performance in 2024 is expected to show a low start and strong finish. Jimpentra, which was expected to confirm sales in the second half, was early listed on a major PBM (Pharmacy Benefit Manager) on April 8, accelerating market share expansion in the US. Uplima, launched in the US last year, has also been listed on one of the top three PBMs in the US. Attention should be paid to the listing news of the remaining major PBMs in Q3. Daishin Securities reported that Celltrion is expecting European approval for Xolair bs (first half) and Stelara bs (second half) within the year.