It is forecasted that in 2023, businesses in the pharmaceutical and medical industries will be positive due to the demand for healthcare, an aging population, and many diseases.
According to VietnamCredit, DHG Pharmaceutical JSC is the largest and most efficient pharmaceutical company in Vietnam.
Specifically, in the fourth quarter of 2022, net revenue of the company reached VND 1,330 billion, up 22% over the same period. In particular, revenue from its products was VND 1,196 billion – an increase of 18% compared to the fourth quarter of 2021.
Cost of goods sold increased less than revenue, so gross profit reached VND 709 billion – an increase of 30% compared to the same period in 2021. After deducting expenses, DHG's after-tax profit was VND 236 billion, up 39% compared to the fourth quarter of 2021.
In the whole year of 2022, both revenue and NPAT of DHG achieved double-digit growth, net revenue reached 4,674 billion VND - an increase of 17% over the same period; EAT reached VND 988 billion, up 27% compared to 2021, EPS reached VND 7,318.
The company’s business plan for 2023 is that net revenue is expected to reach VND 5,000 billion and profit before tax to reach VND 1,130 billion, up 18.5% and 32.5% respectively compared to the planned target in 2022.
As of December 31, 2022, DHG's total assets reached VND 5,168 billion, an increase of VND 554 billion compared to the beginning of the period. Liabilities increased by more than VND 50 billion to VND 876.6 billion, of which short-term loans decreased by 45% to VND 115 billion.
Equity increased by VND 501 billion compared to the beginning of the year, mainly due to the increase in investment and development fund (increasing by VND 290 billion). At the end of the fourth quarter of 2022, DHG Pharma had more than VND 1,018 billion in undistributed profit after tax.
Holding the second position on the list of 8 largest listed pharmaceutical companies in Vietnam is Vietnam Pharmaceutical Corporation – JSC (Vinapharm – DVN).
DVN is the leading enterprise in the pharmaceutical industry in Vietnam with annual revenue of about VND 5,000-6,000 billion. The company has a charter capital of VND 2,370 billion, of which the state capital accounts for 65%, managed by the Ministry of Health (not yet transferred to SCIC). The strategic shareholder is Viet Phuong Investment Group JSC (17%).
DVN is currently the parent company of CPC1, Codupha, Central Pharmaceutical 3, Phabarco and has a series of associated companies and joint ventures, including Sanofi-Synthelabo, OPC Pharmaceutical, imexpharm, DP3, Danapha, Mekopha, Sanofi VN…
According to the General Financial Statements, in 2022 Vinapharm achieved revenue of VND 18.4 billion, down 18% compared to 2021, gross profit was negative VND 430 million, while revenue from financial activities decreased sharply, making profit after tax in 2022 decrease to only VND 27.6 billion, equaling to 11.3% of 2021.
According to the Consolidated Financial Statements, in 2022, the company achieved consolidated revenue of VND 5,585 billion, up 13.8% compared to 2021, but consolidated profit after tax was only VND 110.4 billion, half of 2021. The reason for the decrease in consolidated profit was explained by the company as an increase in selling expenses compared to 2021 and an increase in financial expenses, and an increase in provisioning expenses for financial investment losses compared to 2021.
Traphaco (TRA) owns a strong product portfolio and has growth potential, so we consider this to be the third company among the largest pharmaceutical companies in Vietnam.
In 2022, the company achieved VND 2,400 billion in revenue, and VND 293 billion in profit after tax. This is the third consecutive year TRA has recorded double-digit revenue growth after the low growth period of 2016 - 2019.
It is estimated that revenue from the traditional medicine segment of the company recorded VND 1.5 trillion, up 13%, while other segments also contributed VND 900 billion, up 20% over the same period.
It is forecasted that the company will see a single-digit revenue growth in 2023. Despite Traphaco's strong product portfolio and growth potential, experts are concerned that the weakening economic situation will affect its revenue.
Some Traphaco products are considered preventive products, so consumers can choose cheaper alternatives or stop using them during this time.
However, management board of the company believes that sales restructuring efforts can result in higher revenue per brick-and-mortar pharmacy and more revenue from the pharmacy chain or e-commerce channel.
Gross profit margin may decrease due to higher imported materials, but it is believed that the increase in input costs is not too much, as TRA uses about 65% of domestic raw materials.
Therefore, its revenue for 2023 is forecast to reach VND2,600 billion (up 8% y/y) due to concerns about weakening demand. Profit after tax of the parent company is expected to reach VND 306 billion (up 14% YoY) assuming a slight increase in COGS and a tight control of selling & administrative expenses (SG&A) to ensure the highest profit margin.
With annual revenue reaching over VND 1,000 billion, Imexpharm Corporation, Domesco Medical Import Export Joint Stock Corporation, Binh Dinh Pharmaceutical and Medical Equipment JSC, Ha Tay Pharmaceutical Joint Stock Company, and OPC Pharmaceutical Joint Stock Company are the other companies on the list of 8 largest pharmaceutical enterprises in Vietnam.
Henry Tran – VietnamCredit
