Korean pharmaceutical and biotech companies are planning a year-end issue of bonus shares and cash dividends to raise shareholder value, industry officials said.

As of Monday, Yuhan Corp., Chong Kun Dang, and Hanmi Pharmaceuticals said they determined the issue of new shares for free.

Yuhan and Chong Kun Dang will give 0.05 bonus shares and Hanmi, 0.02 shares, for every single common stock held by existing shareholders.

“This is nothing new. We’ve done this every year through public disclosure,” an official at a drugmaker said.

In contrast to the pharma industry’s halfhearted announcements, biotech companies actively promote bonus shares and cash dividends to restore investor confidence after declines in stock prices and conflicts with minor shareholders over management control.

Huons Group and Celltrion Group announced that their subsidiaries would issue free shares and dole out cash dividends.

Huons Global, the holding company of Huons Group, decided to issue 0.05 shares and 500 won ($0.42) in cash per one share. Huons will also give 0.1 shares and 600 won per one share.

Humedix, another subsidiary of Huons Group, will give 400 won cash dividend per one share but will not issue bonus shares.

Huons Group said it would raise cash dividends slightly this year, compared to last year, because it increased investments for business restructuring, facility expansion, and R&D expansion.

The final dividend amount of the three listed subsidiaries is expected to be confirmed at a general shareholders’ meeting in March 2022.

On Friday, Celltrion Group also said its three listed companies decided on stock and cash dividends. The three companies would maintain the bonus issue ratio at last year’s level and distribute cash dividends, too, the group said.

Celltrion will issue 0.02 shares, and 750 won cash per one share, and Celltrion Healthcare, 0.02 shares and 260 won per one share.

Celltrion Pharm determined on 0.03 shares per share without cash dividends.

“Recent earnings indicated that Celltrion Pharm has shown the most solid growth. Reflecting the high growth potential, we decided to issue bonus shares rather than cash dividends,” an official at Celltrion Group said.

Helixmith, in dispute with minor shareholders over the management right this year, decided to give shareholders 0.1 free shares for one common stock.

Interestingly, the minutes of the board of directors meeting revealed the background and limitations of the bonus issue in the public disclosure.

According to the minutes, Director Oh Jae-seung said although Helixsmith had been continuously announcing R&D results and achievements, it did not have a particular response from the market.

The free stock issue will draw attention from the market, and if the company can announce pipeline achievements and outlooks, it will show a positive side of the company to investors, he said.

Director Noh Dae-rae said a free capital increase is not enough to have a big impact on the market. The company should have a practical and essential policy rather than a shareholder-friendly one.

Choi Dong-kyu and Kim Hun-shik, who joined the board of directors in July recommended by minor shareholders, opposed the bonus issue, saying they were not sure whether the bonus issue at present would help raise shareholder value.