Since 2010, Celltrion has generated 98% of its sales from its sister company, Celltrion Healthcare, which has been unable to sell 55% of the product that it’s bought. Celltrion Healthcare appears to have been established to buy unapproved drugs from Celltrion. It is highly unlikely that an outside third party would have bought these drugs, and we question the economic substance of these past transactions for Healthcare. We think Celltrion’s profits are significantly overstated, by as much as two-thirds in 9M17, owing to continued channel stuffing at Healthcare and the capitalisation of R&D costs. We therefore apply a 50% discount to 2018 consensus forecasts and assume a generous 30x P/E multiple to derive a Celltrion target price of KRW65,000/share, 80% below current levels. SELL/SHORT.