On the listed stock exchange, the pharmaceutical ones are receiving the most attention due to the general sector trend, as well as being the ones with the best defense in the context of the COVID-19.
In the group of pharmaceutical firms which have declared their business plans in 2020, the majority of which all expected an increase or a slight decrease in their revenue, with the most notable one being the strong increase in revenue of Imexpharm (IMP), which estimates that their 2020 revenue will reach 1,750 billion VND, increasing by 23% compared to that in 2019.
Currently, Imexpharm is one of the rare businesses with a GMP-EU qualified factory. In the mechanism of Imexpharm, the revenue gained through self-production and distribution accounts for 89%, while the remaining 11% is achieved via franchised goods.
In the first quarter of 2020, Imexpharm has made provision for materials to ensure that it has enough for the production of goods to supply the market with, in the context of the complicated developments of the COVID-19 epidemic damaging the global supply chains.
Regarding the production expansion plan, the Binh Duong high-tech factory is expected to be EU-approved and EU-GMP certified by the end of the third quarter of 2020. This business is expected to start its commercial operation in the fourth quarter of 2020.
The Pharmaceutical factory and testing center in Dong Thap implemented in late 2019 is also expected to be completed in 2020 to fulfill the goal of diversification of IMP goods to the OTC market, as well as the goal of strengthening the quality testing of the outputs for IMP products.
Traphaco has also set a 2020 revenue growth goal of 17%, with the company focusing on Western medicine production investment in the period between 2020 and 2025. In 2020, this company is going to receive the technology transfer of 10 to 15 new products from its partner, Daewoong. Simultaneously, the company is going to continue looking for new strategic partners to widen their network to receive goods transfer and diversification, assisting the Western medicines development strategy.
While the two aforementioned firms, as well as SPM, PMC, and LDP all, expect their revenue growth to increase, there have been some businesses that think that there will be a drop in their revenue in 2020.
For example, OPC expects its revenue to drop sharply by 18%, AMV expects its to drop by 8%, and Hau Giang Pharmaceuticals and Ha Tay Pharmaceuticals all expect their revenue to remain unchanged this year.
In its recent report, Viet Capital Securities (VCSC) expects its concern that the COVID-19 epidemic may affect the active ingredient production in China, thus reducing the combined revenue margin of self-produced goods of Hau Giang Pharmaceuticals in 2020.
On the other hand, the high reliance on the strongly competitive drugstores channels and the relatively similar product category will limit DHG revenue growth.
Along with the high growth in revenue, Imexpharm Pharmaceutical (IMP) also sets a target of VND 260 billion in profit before tax, increasing by 28.4% compared to 2019. It is immediately followed by SPM.
After the unachieved profit goal of nearly 12 billion VND in 2019, in 2020 SPM aims to reach 15 billion VND, an increase of 28% compared to that in 2019. The company said that it plans to restructure its product portfolio in 2020 towards quality and profitability in addition to investing in new technologies, expanding the international market; increasing the coverage of all provinces and cities nationwide; investing in new brand development; creating momentum for existing brands to continue leading the country, etc.
Although AMV has reduced revenue, EBT is expected to increase by 10% to 245 billion VND. The company says that in 2020 it will accelerate the implementation of sales projects, medical equipment links and investment in testing centers.
Following that, Traphaco sets a target of a 5% profit growth of 180 billion VND. The company is focusing on strategic investment focusing on producing Western medicine products with the target of average revenue growth of 20% / year from now to 2025. DHG Pharma (DHG) is cautious when setting a profit plan of 720 billion VND which is almost flat in 2020.
In the opposite direction, OPC sets a target of only 90 billion VND, down 31% compared to the results achieved in 2019. Lam Dong Pharmaceutical (LDP), after the profit of nearly 12 billion VND in 2019 exceeding 136% of the original business plan, expects its revenue in 2020 to drop by over 24% to over 9 billion VND.
Similarly, Ha Tay Pharmaceutical (DHT) has approved the plan of pre-tax profit in 2020 which is almost flat compared to the previous year. According to DHT, most of the imported raw materials are purchased from China, so when the COVID-19 epidemic started and spread in China, there was a shortage of raw materials for production. This will be a big challenge in 2020 for the pharmaceutical industry in general and DHT in particular.
Several other pharmaceutical enterprises have not yet announced their business plans in 2020 but are attracting great attention from investors such as Binh Dinh - Bidiphar Pharmaceuticals and Medical Equipment (DBD) and its decision to loosen foreign room to 100%. Cuu Long Pharmaceutical (DCL) has reported a net profit in 2019 which is 7 times higher than that in the previous year and Danameco Health (DNM) has had a profit after tax of 8.7 billion VND in 2019, which is more than doubled of that in 2018.
The pharmaceutical industry stocks have long been listed as highly safe stocks because their business products are specific to health. In particular, in the context of the complicated situation of the COVID-19 epidemic, some pharmaceutical stocks will benefit, resulting in a potential breakthrough.
In the first 3 months of 2020, the most impressive increase in the price of DANAMECO Health (DNM) has hit the ceiling for 6 consecutive sessions to reach VND 26,800 / share, which is an increase of 188% compared to the beginning of the year.
However, in the opposite direction, many pharmaceutical stocks have not been able to break through as they are in the general downtrend of the market.
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