Pharmaceutical stocks benefit from disease spread

Pharmaceutical stocks are experiencing an upsurge as fears of coronavirus have boosted demand for healthcare products and services, lifting demand for shares.

Pharmaceutical stocks benefit from disease spread

Workers at DHG Pharmaceutical Company. The pharmaceutical industry is benefiting from the spread of coronavirus and witnessing stock prices rising sharply. — Photo taichinhplus.vn

During the recent outbreak, the benchmark VN-Index fell by some 6.4 per cent, but the pharmaceutical industry is witnessing stock prices rising sharply.

This goes in reverse to last year’s situation, when pharmaceutical stocks were less concerned with low liquidity and stock prices moved sideways or decreased amid the sector’s slowing growth.

Shares of Hau Giang Pharmaceutical Joint Stock Company (DHG) reached its six-month high of VND102,600 (US$4.4) per share on Monday. Since the spread of the disease in early January, DHG has surged nearly 20 per cent.

The company, one of the largest pharmaceutical firms in Viet Nam manufacturing and selling over-the-counter (OTC) medicines, reported profit of VND631 billion in 2019, down 3 per cent year-on-year, mainly due to the four-year low recorded in the third quarter.

DHG did not complete last year’s business plan as it fulfilled only 99 per cent of the annual revenue plan and 95 per cent of the annual profit plan.

At the end of April last year, DHG became a subsidiary of Japan’s Taisho Pharmaceutical Co Ltd after the Japanese drug maker acquired an additional 20.6 million shares of DHG, lifting its stake to 50.78 per cent.

M&A is gradually becoming popular in the pharmaceutical industry. According to SSI Research, in May 2019, Kimia Pharma, an Indonesian state-owned pharmaceutical company, revealed that it was considering acquiring one of Viet Nam's leading pharmaceutical retail chains. Foreign pharmaceutical companies aim at M&A to take advantage of available resources, reducing costs and shortening the time to enter Viet Nam’s market.

Another OTC pharmaceutical producer, Traphaco JSC (TRA), reported a drop of 2.4 per cent in last year’s profit, to VND171 billion, completing the yearly plan. The company’s revenue reached VND1.7 trillion, equal to 92 per cent of the yearly target.

In contrast, businesses operating in the ethical or prescription drugs (ETC) channel, performed more efficiently last year.

Imexpharm Pharmaceutical (IMP) reported profit of VND162 billion, representing a record rise of 17.1 per cent year-on-year. Benefiting from the spread of the coronavirus, IMP shares hit its one-year peak of VND56,000 per share on Monday, up by 16 per cent since early January.

Pymepharco Pharmaceutical (PME) reported an increase of 4 per cent in profit and a rise of 10 per cent in revenue last year. The company fulfilled 97 per cent of the revenue plan and completed 100 per cent of the profit plan set for the year.

 

Regarding Viet Nam Pharmaceutical Corporation (DVN), revenue decreased by 4.3 per cent to VND5.7 trillion. Profit increased by 7.3 per cent to VND221 billion, mainly due to cost reduction.

According to FPT Securities (FPTS), the development of the ETC channel in 2019 was mostly thanks to the growth of the generic drug business.

A generic drug is a pharmaceutical drug that contains the same chemical substance as a drug that was originally protected by chemical patents. Generic drugs are allowed for sale after the patents on the original drugs expire.

They work the same as original medicines but is sold at lower prices because the drug manufacturer does not have to duplicate the original clinical trials for effectiveness and safety, which lowers the cost to bring the drug to market. Generics are not less expensive because they are lower in quality.

Another factor that promotes ETC growth is the increase in the percentage of people covered by insurance in Viet Nam, which rose from 28 per cent to 90 per cent between 2005 and 2019.

The consumption of drugs via ETC channel has also slowed because the list of active ingredients allowed to be circulated without prescription is reduced from 250 to 243 and the trading of antibiotics in retail has been tightened to minimise antibiotic resistance.

This year, SSI Research forecasts the pharmaceutical market will grow by 9-10 per cent thanks to population growth and increasing healthcare demand.

The growth motivation for the pharmaceutical industry also originates from rapid urbanisation, which promotes the development of the middle class as well as average income per capita.

According to the Viet Nam Drug Administration (DAV), the size of the pharmaceutical industry is forecast to reach $7.7 billion by 2021. — VNS

Foreign investors continue to target Vietnam’s pharmaceutical industry

Foreign investors continue to target Vietnam’s pharmaceutical industry

Vietnam's pharmaceutical market has a lot of potential coming from the demographics, rising income and priority policies of the government.

VN's pharmaceutical import turnover may reach $3 billion by end of year

VN's pharmaceutical import turnover may reach $3 billion by end of year

With the average pharmaceutical import turnover of $245 million per month, the figure of the whole year of 2019 may reach $3 billion, equaling 50 per cent of the whole scale of the market.  

 
 

Other News

.
Over half of population to shop online by 2025
Over half of population to shop online by 2025
VIDEOicon  25/05/2020 

Vietnam is aiming to have 55 percent of its population shopping online by 2025, with average consumer spending rising to 600 USD per year, according to a master plan on e-commerce development for 2021-2025.

US becomes Vietnam’s largest supplier of fruits, vegetables
US becomes Vietnam’s largest supplier of fruits, vegetables
BUSINESSicon  25/05/2020 

The US has become Vietnam’s largest supplier of fruits and vegetables in the first four months of the year, recording a 44% increase year-on-year in export value to $102.1 million, according to the Vietnam Fruit and Vegetable Association.

Deadly new seafood virus should be prevented: Ministry
Deadly new seafood virus should be prevented: Ministry
BUSINESSicon  25/05/2020 

The Ministry of Agriculture and Rural Development (MARD) has called for strengthening the management of seafood transportation across the border.

World-famous resilience keeps up M&A appetite
World-famous resilience keeps up M&A appetite
BUSINESSicon  25/05/2020 

Although the current pandemic is spreading rapidly in many countries and causing severe damage to the global economy, Vietnam continues to effectively control the situation while ensuring that economic activities are not interrupted.

Fate of five of 12 loss-making projects uncertain with EPC contractors out of reach
Fate of five of 12 loss-making projects uncertain with EPC contractors out of reach
BUSINESSicon  24/05/2020 

The fate of five of the 12 notorious loss-making projects remain uncertain because the Chinese contractors cannot be taken to court.

EVFTA implementation requires local firms to thoroughly grasp regulations
EVFTA implementation requires local firms to thoroughly grasp regulations
BUSINESSicon  25/05/2020 

Businesses and management agencies should be fully aware of the regulations and rights included within the EU-Vietnam Free Trade Agreement (EVFTA) before the trade deal fully comes into effect.

Resort real estate anticipates quick rebound
Resort real estate anticipates quick rebound
BUSINESSicon  24/05/2020 

Resort real estate is one of the segments expected to see the fastest pace of recovery in the post-pandemic times.

Commitment level of tariffs in new-generation FTAs comes under scrutiny
Commitment level of tariffs in new-generation FTAs comes under scrutiny
BUSINESSicon  24/05/2020 

Up to 99% of tariff lines with partner countries are poised to be eliminated over the course of the 10-year roadmap set out in new-generation trade pacts 

Vietnamese retail to be at heart of post-pandemic recovery
Vietnamese retail to be at heart of post-pandemic recovery
BUSINESSicon  24/05/2020 

If the Vietnamese economy is able to successfully enjoy a rapid economic recovery following the conclusion of the novel coronavirus (COVID-19) pandemic, the retail industry will be one of the driving factors in this revival process.

Vietnam’s first private IT museum inspires young generation
Vietnam’s first private IT museum inspires young generation
SCI-TECH & ENVIRONMENTicon  24/05/2020 

Vietnam’s first information technology museum was established by Doctor Nguyen Chi Cong, former Head of the Department of Science and Technology under the Vietnam Information Technology Association.

Vietnam in favourable position in new int’l economic order thanks to EVFTA: expert
Vietnam in favourable position in new int’l economic order thanks to EVFTA: expert
BUSINESSicon  24/05/2020 

Associate Professor, Dr. Chu Hoang Long from the Australian National University (ANU) on May 23 expressed his belief that the EU-Vietnam Free Trade Agreement (EVFTA), once effective, will boost two-way trade thanks to eased tax barriers.

Vietnam Railway reports VND600bn in losses
Vietnam Railway reports VND600bn in losses
BUSINESSicon  23/05/2020 

The Vietnam Railway Corporation (VNR) is facing losses of over VND600bn (USD26m) in 2020 because of Covid-19.

Four-month earnings slow but firms hope for better months ahead
Four-month earnings slow but firms hope for better months ahead
BUSINESSicon  23/05/2020 

A number of listed companies have announced lower earnings in April after closing for half of the month.

Demand for ready-built factories and warehouses increasing: CBRE
Demand for ready-built factories and warehouses increasing: CBRE
BUSINESSicon  23/05/2020 

The development of e-commerce together with delays to import and export activities due to disrupted logistics services has accelerated demand for ready-built factories and warehouses during the COVID-19 outbreak in Viet Nam.

Real estate firms gear up for the race after pandemic
Real estate firms gear up for the race after pandemic
BUSINESSicon  23/05/2020 

 Property firms are gearing up to tap opportunities from the post-pandemic recovery of the real estate market, which was predicted to soon get back on its feet.

Vietnam ready for new investment influx
Vietnam ready for new investment influx
BUSINESSicon  23/05/2020 

Foreign investors are speeding up the restructuring and reallocation of their production networks globally, with Vietnam considered a bright candidate for investment given its location within the world’s most dynamically-developing region.

S&P maintains stable outlook for Vietnam’s sovereign credit rating
S&P maintains stable outlook for Vietnam’s sovereign credit rating
BUSINESSicon  23/05/2020 

S&P Global Ratings has announced it has retained Vietnam’s sovereign credit rating at BB, with a stable outlook, according to the Ministry of Finance.

Vietnam to launch mobile money in June
Vietnam to launch mobile money in June
BUSINESSicon  25/05/2020 

Mobile money is about to be launched in Vietnam despite worries about management methods.

Covid-19 resets operational mode of VN retail market
Covid-19 resets operational mode of VN retail market
BUSINESSicon  23/05/2020 

Revenue from e-commerce has increased rapidly during Covid-19, but many traditional retailers have had to give back business premises to landlords.

Weak growth outlook to spur further monetary easing in Vietnam: Fitch Solutions
Weak growth outlook to spur further monetary easing in Vietnam: Fitch Solutions
BUSINESSicon  22/05/2020 

Given the weak economic outlook in Vietnam, Fitch Solutions expects further easing measures to be applied over the rest of 2020 as the country is still targeting real gross domestic product (GDP) growth above 5%.

 
 
 
Leave your comment on an article

OR QUICK LOGIN