South Korean pharmaceutical companies are competitively announcing generous bonus stock issuance or stock dividends as a part of their year-end shareholder return programs.

On Wednesday, biopharmaceutical developer Celltrion Inc. announced that it will issue 0.05 shares for each single common share to its shareholders, which is equivalent to 5 percent dividend yield at market value.

Other local pharmaceutical companies - Ildong Pharmaceutical Co. Bukwang Pharmaceutical IND Co., BC World Pharm Co., and Huons Co. - also unveiled their stock dividend offerings. Bukwang has been making stock dividend payouts every year since 1990 except for 2004 when it issued bonus shares instead.

Yuhan Corp. also announced bonus stock issuance for the first time in five years. Since it joined Seoul trading in 1962, it has distributed bonus issues for more than 60 times, but it had suspended its shareholder return program since 2011 after facing business uncertainties such as fall in drug price.

Boryung Pharm Co. said it will issue 0.05 bonus shares per each common share while JW Pharmaceutical Corp. will issue 0.03 bonus shares for every single common share and single preferred share. JW Pharmaceutical has been issuing bonus shares for 10 straight years.

But it is uncertain whether Hanmi Pharmaceutical Co. and its affiliate Hanmi Science Co. facing multiple whammies including cancellation of its drug technology export contract and illegal insider trading allegation would continue its 10-year-long tradition of bonus issuance.

The bonus issue and stock dividend both offer additional shares to existing shareholders, but the gains from selling bonus shares are non-taxable while shareholder has to pay 15.4 percent tax on income earned from a stock dividend received.

By Kim Hye-soon

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