[Edaily Reporter KIM SAE-MI ] Celltrion has decided to allocate one-third of its annual consolidated net income to shareholder returns going forward. As its first shareholder return initiative, the company is also proceeding with a 100 billion won share buyback.

Celltrion(068270)announced on the 31st that it held a board of directors meeting and decided to purchase a total of 524,384 shares of its own stock on the open market. Based on the closing price on the day before the board resolution, this amounts to approximately 100 billion won, and the purchases are scheduled to begin on the 1st of next month.

In addition, Celltrion announced a mid- to long-term policy in a shareholder notice issued that day, stating that it will allocate one-third of its net income, based on consolidated financial statements, as funds for shareholder returns in each fiscal year going forward.

Celltrion stated, “The company and its management take seriously the concerns and frustration our shareholders may be feeling due to recent stock price trends and increased market volatility,” and pledged to pursue a clearer and more predictable shareholder return policy.

As for the specific methods of shareholder returns, the company decided to implement a combination of cash dividends and share buybacks and cancellations. It plans to determine the proportion of each method annually, taking into account stock price levels, market conditions, financial structure, cash flow, and investment plans.

In particular, if the company determines that its stock price is significantly undervalued relative to its enterprise value, it will increase the proportion of share buybacks and cancellations; conversely, if direct shareholder returns are deemed more effective, it will expand the proportion of cash dividends. The specific scale and method of returns for each fiscal year will be finalized following the confirmation of financial results and through relevant procedures, such as Board of Directors meetings and the Annual General Meeting of Shareholders.

The company also plans to proceed with the cancellation of the treasury shares purchased this time following a future board resolution. Canceling treasury shares reduces the number of outstanding shares, which, all other conditions being equal, has the effect of increasing earnings per share (EPS) and book value per share (BPS).

Including this transaction, Celltrion’s total treasury stock repurchase for this year amounts to 1,600,288 shares, valued at 300 billion won. According to the company, the cumulative volume of treasury stock repurchased over the past three years is approximately 8.93 million shares.

Celltrion plans to continue reviewing additional share buybacks and cancellations in the future, taking into account available funds and market conditions, should it determine that there is a significant discrepancy between the stock price and the company’s intrinsic value.

A Celltrion official stated, “We will not treat this 100 billion won share buyback as a one-time measure, but rather as part of a medium- to long-term policy to allocate one-third of our annual consolidated net income to shareholder returns,” adding, “We will combine cash dividends with share buybacks and cancellations in accordance with market conditions.”