Nomura Securities Wednesday recommended a ‘Reduce’ rating on Korea’s bellwether biosimilar manufacturer Celltrion and its distributor Celltrion Healthcare, claiming the stocks to be overvalued..

Its recommendation also has an outlook that the 12-month return from the two stocks will not match market performance. The Japanese brokerage house set target prices at 230,000 won ($215) for Celltrion and 120,000 won for Celltrion Healthcare. Shares of Celltrion plunged on the negative report, finishing 9.76 percent down at 313,500 won, and Celltrion Healthcare skidding 14 percent to 130,500 won.

Nomura Securities noted overshooting in Celltrion’s gain of 227 percent in the recent six months versus the Kosdaq index rise of 36 percent in the same period. "Celltrion’s price-earning ratio (PER) is 64 against its profit outlook for 2019,” it added.

Celltrion, the largest Kosdaq stock in market capitalization, is due to be re-listed on the primary Kospi next month.

The report also pointed out that “the value of Celltrion Healthcare shares gained 212 percent after its listing on July 17 on the secondary market. Although it deserves a valuation premium over global competitors, the current stock price is burdensome.”

Still, Celltrion and Celltrion Healthcare are price competitive against rival companies, the report said, adding "Celltrion enjoys benefits as a pioneer in the development of biosimilars for blockbuster drugs and Celltrion will see a steep rise in future profits.”

The report also said that it took just three years for Celltrion Healthcare to reach the current market share in Europe. But it would take four years to do the same in the U.S. market because of a different market structure.

By Shin Heon-chul and Minu Kim

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]