Announcement of regular stock purchase on teh 18th of last month
Purchasing an additional KRW 100 billion of treasury stock followed by cancellation of KRW 560 billion
Third incineration this year… Cumulative amount of 1.25 trillion won
“Continue to enhance shareholder value through treasury stock use”
While the political situation is in turmoil and the domestic stock market is showing unstable trends due to President Yoon Seok-yeol’s declaration of martial law, celltrion is pursuing a large-scale cancellation of its own shares to stabilize the stock price and improve shareholder value. Last month, after announcing a policy to purchase treasury stocks on a regular basis, the company purchased additional treasury stocks worth 100 billion won in three days, and then decided to cancel more than 500 billion won worth of treasury stocks in about 15 days. Even in business conditions with heightened uncertainty, the company still believes that stock prices are undervalued and is accelerating efforts to improve shareholder value by using treasury stocks.
Celltrion announced on the 4th that it has begun the process of canceling approximately 3.01 million shares of treasury stock, which was resolved to increase shareholder value.The company plans to continue to stabilize its stock price and improve shareholder value through continuous shareholder-amiable policies such as treasury stock cancellation and share repurchase.
The total number of treasury shares decided to be canceled this time is 3,011,910. this is approximately 25% of the stock held. It is 1.4% based on the total number of issued shares. Based on the closing price on december 3, it is equivalent to approximately 562.9 billion won.
with this stock cancellation, the total number of issued shares of Celltrion will decrease from 217,078,554 shares to 214,066,644 shares. The scheduled incineration date is January 6, 2020, and the scheduled listing date is January 15, 2025.
Celltrion announced that it decided to cancel its treasury shares through a board of directors meeting held on the 4th. As the number of shares in circulation decreases due to the cancellation of treasury shares,the stock value is expected to naturally increase.In the case of Celltrion, the group has consistently implemented shareholder-friendly policies to improve shareholder value.Last year alone, a total of 1.25 trillion won worth of treasury stock was purchased, and this year, 430 billion won worth of treasury stock is being acquired.The company is seeking to maximize shareholder value by simultaneously canceling the purchased treasury stock.
The stock repurchase and cancellation is evaluated as a move that reflects the positive outlook for future performance growth. As the company is growing rapidly, it plans to continue to implement shareholder-friendly policies such as dividends and share buybacks to return profits to investors.
A Celltrion official saeid, “As of the third quarter of this year, Celltrion has already recorded the highest sales as its inception and is expected to easily achieve 3.5 trillion won, the highest ever on an annual basis.” He added,“As growth is accelerating,we will pursue an active shareholder return policy.” “We will do our best to continue mutual growth with shareholders and maximize corporate value.”
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Kim Min-beom, Donga.com reporter [email protected]
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How can share buybacks influence shareholder value in a turbulent market?
Interview Between Time.news Editor and Financial Expert
Editor: Welcome to Time.news! Today, we have the pleasure of speaking with Dr. Hyun-Soo Lee, a financial expert and analyst specializing in corporate finance and market trends. Dr. Lee, thank you for joining us today.
dr. Lee: Thank you for having me.It’s a pleasure to be here.
Editor: Let’s dive right into it. Celltrion recently announced a critically important move to purchase a whopping 100 billion won in treasury stocks, following up with a cancellation of around 560 billion won in treasury shares. What do you think is driving this decision?
Dr. Lee: Celltrion’s decision appears to stem from a desire to shore up investor confidence amid a turbulent political landscape and an unstable stock market. By buying back shares, they not only decrease the number of shares available but also signal to the market that they believe their stock is undervalued.
editor: that’s an interesting viewpoint, especially as South Korea’s stock market is experiencing fluctuations due to President Yoon Seok-yeol’s declaration of martial law. How do external political factors influence corporate financial decisions like this one?
Dr. Lee: External factors play a crucial role in shaping corporate strategies. When the political climate is unstable—as it is indeed now—companies frequently enough seek to reassure investors.share buybacks and cancellations can create a more positive outlook on the company, helping to stabilize stock prices and enhance shareholder value. in this case, Celltrion seems to be taking proactive steps to protect its stock from market volatility.
Editor: You mentioned the concept of shareholder value. Could you elaborate on how managing treasury stocks impacts this?
Dr. Lee: Certainly! Shareholder value is essentially about returning wealth to shareholders. By purchasing treasury stocks, a company can reduce the supply of its shares, which can perhaps increase the stock price.Additionally, canceling these shares permanently removes them from circulation, which can increase earnings per share (EPS) and make the company’s financials look healthier. For Celltrion, this strategy is about instilling trust and demonstrating their belief in the company’s future profitability.
Editor: So, in a way, it acts as both a stabilizing force and a confidence booster for investors?
Dr. Lee: Exactly! in uncertain times,this strategy can be particularly effective. It shows that the company is willing to invest in itself, which tends to resonate positively with both current and potential investors.
Editor: looking ahead, how do you anticipate this strategy will play out for Celltrion? Is there a risk involved?
Dr. Lee: The potential rewards are significant—stable stock prices, enhanced shareholder trust, and possibly increased investment.Though, the risks are also noteworthy. If the political and economic conditions worsen, even aggressive stock buybacks may not prevent a decline in share prices. Furthermore, they have to be cautious about using too much cash for buybacks instead of investing in growth opportunities. It’s a balancing act, really.
Editor: It sounds like a complex but calculated approach. Before we wrap up, any final thoughts on what other companies might learn from Celltrion’s actions?
Dr. Lee: Yes, I believe other companies could look to Celltrion as a case study in responsive corporate governance. It highlights the importance of being proactive about shareholder concerns, especially during turbulent times. If managed wisely, such strategies can help sustain long-term shareholder loyalty and corporate resilience.
Editor: Thank you, Dr. Lee, for your insights. It’s fascinating to see how companies navigate these uncertain waters. We appreciate your time today!
Dr. Lee: Thank you for having me. It’s been a pleasure discussing these important topics with you!