Pharmaceutical firms are not entirely confident with performance in 2020 as the COVID-19 pandemic has turned the global supply chain up-side-down.
A lab at Ha Tay Pharmaceutical JSC (HNX: DHT). — Photo tinnhanhchungkhoan.vn
Imexpharm Corporation (HoSE: IMP) targets to increase total revenue and pre-tax profit up 23 per cent and 28.4 per cent to VND1.75 trillion (US$74.5 million) and VND260 billion in 2020, respectively.
Big player Traphaco JSC (HoSE: TRA) sets a 17 per cent growth in total revenue, which is hoped to reach VND2 trillion, and a 9 per cent increase in total profit, which is expected to hit VND180 billion in 2020.
The company in 2020-25 will focus on making new products and receive new technologies from its South Korean partner Daewoong while seeking new strategic partnerships.
Other firms such as Saigon Pharma (SPM JSC, HoSE: SPM) and Pharmedic (Pharmaceutical Medicinal JSC, HNX: PMC) eye their earnings will increase between 1 per cent and 8 per cent on-year in 2020, respectively.
Earnings at DHG Pharmaceutical JSC (HoSE: DHG) and Ha Tay Pharmaceutical JSC (HNX: DHT) are forecast to edge up this year while Lam Dong Pharmaceutical JSC (HNX: LDP) expects its pre-tax profit in 2020 will drop a quarter to more than VND9 billion.
According to the firms, the major problem for 2020 is the global supply chain, which has been interrupted and remained stagnant since the end of the Tet (Lunar New Year) holiday in late January as the coronavirus pandemic has hit the entire global economy, forcing businesses to close temporarily.
Ha Tay Pharmaceutical JSC and DHG Pharmaceutical JSC are buying materials from Chinese suppliers. As the COVID-19 started in Wuhan, China in late December, it has disrupted the supply and caused a shortage of production inputs for the two firms.
Meanwhile, Imexpharm now has a European-standard facility. That helps the company earn 89 per cent of its total revenue from producing and distributing its own products and store a sufficient amount of materials for a potential production recovery.
The pharmaceutical stocks are widely-known as defence for investors as the companies have had good earnings based on rising demand for medicines and healthcare services and they have also had good cash dividend records.
But pharmaceutical stocks such as DHG, DHT and TRA have lost about 21.6-28 per cent in the last two months. — VNS
Facing significant expansion from multinational corporations, Vietnamese drug giants took a hit in 2019 despite new strategies, signalling an uninspiring outlook for future growth.
While several sectors are being hit by the coronavirus outbreak, the pharmaceutical and healthcare industry is taking an advantage, with numerous expansion strategies among players being placed in the gun barrel.