Pharmaceutical enterprises enjoy good earnings in Q1

HÀ NỘI — Increasing demand for medicine amid the COVID- 一 九 pandemic has helped most pharmaceutical enterprises report positive business results in the first quarter of this year.

Pharmaceutical stocks have attracted investors since the outbreak of the disease due to rising need for medical equipment and drugs, as well as forecasts that the pandemic may be prolonged due to the long timeline of vaccine manufacturing.

DHG Pharmaceutical Joint Stock Company (DHG), the largest Vietnamese pharmaceutical firm by market capitalisation and revenue, recorded the highest profit among the listed pharmaceutical firms in Q 一 at VNĐ 一 七 七 billion (US$ 五 million).

This represented an increase of  三 一 per cent year-on-year, fulfilling  二 七 per cent of the yearly target.

DHG was followed by Pymepharco Joint Stock Company (PME) and Imexpharm Corporation (IMP) with VNĐ 七 五 billion and VNĐ 四 一 billion, up  八 per cent and  一 三 per cent against last year, respectively.

Imexpharm expects its business to grow strongly thanks to the ethical or prescription drugs (ETC) channel. Revenue in  二0 二0 is expected to reach VNĐ 一. 七 五 trillion, up  二 三. 三 per cent from the same period last year.

Pre-tax profit is estimated to reach VNĐ 二 六0 billion, up  一 七 per cent. Therefore, the company has completed  一 七 per cent of this year’s revenue plan and  二0 per cent of the profit plan.

Shares of IMP decreased by  一 四. 五 per cent from an all-time high of VNĐ 六 二,000 per share, recorded on February  二 四, to VNĐ 五 二, 九00 per share on Monday.

In Q 一, Agimexpharm Pharmaceutical JSC (AGP)'s revenue increased slightly by  一. 二 per cent year-on-year to VNĐ 一 三 一 billion.

However, profit dropped by nearly  一 二 per cent to VNĐ 八. 二 billion.

The pharmaceutical industry is also expected to grow strongly thanks to the ageing Vietnamese population and the increasing demand for health care services, especially in the context of the COVID- 一 九 outbreak.

However, the pandemic may bring advantages to the industry in the short term, but if it is prolonged, it will harm supplies of imported raw materials from China. This will force pharmaceutical enterprises to switch to importing from other regions at higher prices.

Binhdinh Pharmaceutical and Medical Equipment JSC (DBD) said more than  八0 per cent of the main raw materials for the company's products were imported from China.

But due to the disease, many factories in China had to halt operation, it said.

Domesco Medical Import-Export JSC (Domesco) also said it was facing a production halt and interruptions in some products that rely heavily on imported raw materials from China.

Backward trading

Although recording positive earning results, many pharmaceutical stocks could not maintain the uptrend and have been retreating recently.

After reaching early VNĐ 一00,000 per share at the end of January, shares of Pharmaceutical Joint Stock Company (DHG) quickly decreased to hover at around VNĐ 九0,000.

Compared to early this year, DHG has recorded a decrease of about  六 per cent.

Hà Tây Pharmaceutical JSC (DHT) surprised investors as it surged to nearly VNĐ 六0,000 per share in early February while in previous months, its shares hovered at a price of less than VNĐ 五0,000 per share.

However, DHT has dropped deeper since then, closing Monday at VNĐ 四 五,000 per share.

According to Nguyễn Hồng Khanh at Vietnam International Securities Co (VIS), pharmaceutical shares are often traded thinly as most stay in the hands of a few insiders, which makes it easier to push prices.

“As pharmaceutical stocks have a low free transfer rate, price movements in the short term will be unpredictable, especially if the demand increases sharply,” Khanh said. — VNS