Yuhan sets ambitious targets for annual licensing deals, 30% shareholder return by 2027

Yuhan Corp. has unveiled plans to sign at least one licensing-out deal per year through 2027 and achieve a shareholder return rate of more than 30 percent via treasury stock sales.

Yuhan released its “Corporate Value Enhancement Plan” in a public disclosure on Wednesday. The company divided its plan through 2027 into two parts -- corporate value enhancement and shareholder value enhancement (shareholder return).

To enhance corporate value, Yuhan proposed three targets: attaining an annual sales increase rate of 10 percent or more (2024-2027), a return on equity (ROE) of more than 8 percent in 2027, and R&D innovation.

From 2024 to 2027, the company plans to increase its compound annual growth rate (CAGR) of revenue to 10 percent or higher. From 2020 to 2023, the company's CAGR was 4.9 percent.

The company also plans to increase its ROE from 7.2 percent to 8 percent by 2027. ROE indicates how much profit a company makes in a year using its equity capital.

To this end, Yuhan has proposed “R&D innovation.”

More specifically, the company said it would export at least one technology yearly and create at least two new clinical pipelines.

Yuhan currently has 33 new drug pipelines, including those in the preclinical stage, with eight having progressed to the clinical stage, including out-licensing cases. The company has achieved five technology export deals, notably including Leclaza (lazertinib), which received U.S. FDA approval in August after being licensed to Janssen.

To enhance shareholder value, the company has proposed an average return to shareholders of more than 30 percent from 2025 to 2027. Specifically, the company said it would burn off 1 percent of its treasury stock by 2027 (by burning off holdings or purchases) and increase the total dividend per share (DPS) by 30 percent or more by 2027.

Burning off 1 percent of treasury shares amounts to about 800,000 shares and 120 billion won ($85.7 million), assuming a stock price of 150,000 won. In addition, the company plans to increase its DPS in stages through 2027, totaling more than 30 percent from the 2023 dividend. In doing so, Yuhan aims to secure predictability and establish dividend stability.

“We will maximize the performance of our main businesses, including pharmaceuticals and CDMOs, and increase technology exports and royalty revenues,” Yuhan said. ‘We will achieve a virtuous cycle of R&D investment and performance to secure the ‘second lazertinib' and focus on developing globally innovative new drugs.”

It continued, “We will continue to consider shareholder-friendly treasury stock policies to realize a stable dividend policy and increase our ROE to achieve dividend expansion.”