Vietnam’s pharmaceutical companies reported positive business results in the third quarter of 2022. Several set a record in profit.
According to KIS Vietnam Securities Corporation, Vietnam’s pharmaceutical industry announced revenue of 10,899 billion VND, up 12.7% over the same period in 2021 and 2.3% compared to the previous quarter.
Profit after tax of the industry reached 827 billion VND, up 29.8% over the same period last year and up 13.1% compared to the previous quarter. The top 5 companies in the industry, Vimedimex Medi-Pharma Joint Stock Company (VMD), Vietnam Pharmaceutical Corporation (DVN), DHG Pharmaceutical Joint Stock Company (DHG), Codupha Central Pharmaceutical Joint Stock Company (CDP), and TRAPHACO Joint Stock Company (TRA) accounted for more than 52% of total industry revenue.
In the third quarter, DHG Pharma recorded net revenue of 1,162 billion VND, up 23% over the same period last year. Its gross corporate profit reached 578 billion VND, up 26%. The enterprise recorded a profit after tax of 262 billion VND, up 30% compared to the third quarter of 2021. That is also the highest quarterly profit ever of the company.
In the first 9 months of 2022, DHG Pharma recorded net revenue of 3,346 billion VND and profit after tax of 752 billion VND, up 15% and 24%, respectively, over the same period in 2021. With those results, after 9 months, DHG Pharma has completed 79% and exceeded 10.2% of the 2022 annual plan.
In the third quarter of 2022, Traphaco's profit after tax increased by 8.5% over the same period in 2021 to nearly 77 billion VND. In the 9 months of 2022, Traphaco recorded net revenue of 1,818 billion VND, up 14% over the same period. Profit after tax of the enterprise reached 251 billion VND, up 28% over the same period last year. After three quarters, Traphaco has completed 77.5% of the revenue plan and 87.8% of the profit plan.
KIS Vietnam Securities believes that Vietnam’s pharmaceutical industry in the fourth quarter of 2022 still has many growth drivers, thanks to the hospitals operating at full capacity, boosting the demand for medical examination and medicine.
In the long term, Vietnam’s pharmaceutical industry presents a lot of growth potential for both manufacturing companies and retail groups due to the large size of Vietnam's population and the rapidly aging population.
The World Bank forecasts that the number of people aged 65 and over in Vietnam will grow by more than double by 2040, accounting for 18% of the total population, boosting healthcare spending. Therefore, the growth of the expenditure on pharmaceuticals in Vietnam is still very positive, especially in a fragmented market full of potential that is pharmaceutical retail.
According to Viet Dragon Securities Company (VDSC), Vietnam's healthcare market is growing fast. Total spending on health increased from 16.1 billion USD in 2017 to more than 20 billion USD in 2021. Pharmaceutical spending also increased to more than 6.6 billion USD in 2021.
In the coming time, the prospect of Vietnam’s healthcare industry is predicted to be bright thanks to the resonance coming from sales channel growth, population structure, etc. The pharmaceutical market is getting hotter and hotter as more big players participate in the professional pharmacy chain race.
VDSC believes that the growth driver of the pharmaceutical industry will come from the expansion of pharmacies, hospitals, and the increasing average spending on pharmaceuticals. In the long term, the growth driver also comes from the aging trend of Vietnam's population.
As per the calculation from VNDIRECT Securities Company in 2021, Vietnam has about 57,000 traditional retail pharmacies, accounting for about 85% of the market in the total size of 7 - 8 billion USD of the whole industry. This number has shown a lot of room for professional development for the big names in the pharmaceutical retail sector. Those firms are likely to change the market, especially when the modern drugstore chain currently accounts for only 15% of the market.
Compiled by VietnamCredit