Pharmaceutical and Bio Companies Consecutively Buy Back Shares...All-Out Effort to Defend Corporate Value

Dong-A ST Decides on Direct Acquisition Worth 10 Billion KRW
Macrogen Follows Last Year's 5 Billion with 3 Billion This Year
Yuyu Pharma, Humasis, and Others Also Acquire Treasury Stocks

On the 26th, the KOSPI closed near the 2,250 mark, rising compared to the previous day. On this day, the KOSPI closed at 2,249.56, up 14.49 points (0.65%) from the previous session.
[Image source=Yonhap News]

[Asia Economy Reporter Lee Gwan-joo] Domestic pharmaceutical and bio companies have been launching consecutive share buybacks, engaging in an all-out effort to defend corporate value. This is interpreted as a decision to enhance shareholder value amid the judgment that their own value is not being properly evaluated in the unstable stock market situation.

According to the pharmaceutical and bio industry on the 27th, Dong-A ST held a board meeting the day before and decided to purchase treasury shares worth 10 billion KRW. This share buyback will be carried out four times over one year, and the purchase method was decided as direct acquisition, which requires completing the purchase of a set amount within a specified period. A Dong-A ST official explained, “Considering the currently held pipeline and solid performance, we judged that the current stock price is undervalued compared to corporate value,” adding, “This is the first share buyback since transitioning to a holding company system, and we will strive to enhance shareholder value.”

In fact, Dong-A ST’s third-quarter performance announced on the same day showed steady growth. Sales reached 158.3 billion KRW, a 4.2% increase compared to the same period last year, and operating profit was tentatively estimated at 14.2 billion KRW, up 21.8%. Supported by the share buyback decision and favorable performance, Dong-A ST’s stock price closed at 51,700 KRW, up 4.02% the previous day.

Genome analysis company Macrogen also recently decided to acquire treasury shares worth 3 billion KRW. The acquisition process will proceed through market purchases via Samsung Securities until October 20 next year. Macrogen had previously purchased treasury shares totaling 20 billion KRW over three occasions?10 billion KRW in 2018, 5 billion KRW in 2019, and 5 billion KRW last year?to enhance shareholder value. The company stated, “Amid growing concerns over the global economic downturn and increasing instability in the Korean stock market, this decision expresses the company’s strong commitment to stock price stabilization, shareholder value enhancement, and responsible management.”

Earlier, point-of-care testing company Humasis signed an additional trust contract for acquiring treasury shares worth 20 billion KRW at the end of last month. Humasis also signed trust contracts for acquiring treasury shares worth 10 billion KRW and 20 billion KRW in March and May this year, respectively, and continued its shareholder-friendly policy by conducting a treasury stock cancellation worth 5 billion KRW on the 1st of last month.

Pharmaceutical and medical device companies have also engaged in share buybacks. Yuyu Pharma decided to acquire treasury shares worth 2 billion KRW. The acquisition will be conducted through on-market purchases on the KOSPI market, with an expected acquisition volume of 304,878 common shares, to be completed by December 19. Clasis, a skin beauty medical device company, decided to purchase treasury shares worth 20 billion KRW for the first time since the management change in the first half of this year, with the process continuing until March 22 next year.

Share buybacks are regarded as a representative shareholder-friendly policy and a method to enhance corporate value. An industry official said, “With the ongoing Ukraine war and high exchange rates, the market situation is challenging,” adding, “This appears to be a move to stabilize stock prices and gain market trust.”

This content was produced with the assistance of AI translation services.