Pharmaceutical firm Tipharco posts record after-tax profit in 2022

Tipharco Pharmaceutical JSC recorded an after-tax profit of VND18.2 billion ($773,600) in 2022, 19 times higher than the previous year and the highest since its establishment in 1976 after joining Bamboo Capital Group nearly a year ago.

Net revenue of the company, registered on the unlisted public company market (UPCoM) as DTG, reached VND297.1 billion ($12.63 million), up 46% year-on-year.

Tipharco attributed the outstanding results to the board of directors and shareholders reaching consensus on development strategy, the swift implementation of positive solutions, and Bamboo Capital Group’s support in organization and management.

In addition, Tipharco actively promoted sales, expanded distribution channels and focused on developing key products such as antibiotics, digestive, cardiovascular and diabetes drugs, and supplementary foods. Inefficient distribution systems were restructured while new potential distribution channels were launched.

The firm also managed input costs and reduced interest expenses. Corporate governance has also been renewed, making employees the center of the transformation process.

The restructuring and reasonable business strategies helped Tipharco's gross profit margin improve from 16.6% to 23.3%. The cost/net revenue ratio and other expenses were well controlled, resulting in a net profit margin of 6.1%. In 2022, sales of Tipharco's key products grew 248% over the same period in 2021, with output soaring 200%.

At the end of 2022, a new distribution channel through the Tesla Pharma network was formed, in addition to the traditional distribution channels like hospitals and pharmacies. The Tesla distribution network is expected to become Tipharco's main sales channel.

In 2023, Tipharco targets net revenue of VND360 billion ($15.3 million) and after-tax profit of VND30 billion ($1.27 million), growing 21% and 65% year-on-year, respectively.

This year, the company will spend up to VND27.3 billion ($1.16 million) raising capacity, building warehouses, and purchasing machinery and equipment.

As of December 31, 2022, Tipharco's total assets stood at VND262.9 billion ($11.17 million) and equity was VND135.5 billion ($5.76 million). The company’s current charter capital is VND63.5 billion ($2.7 million). It plans to increase its charter capital to invest in machinery and equipment for factories, research and development, and expanding distribution systems in the Mekong Delta and Southeast regions.

Tipharco’s general meeting of shareholders on March 17 approved a plan to increase chartered capital under which the firm will offer another 22,358,385 shares to existing shareholders, with an expected price of VND10,000 ($0.43) per share.

The company also plans to move its DTG shares from the UPCoM to the Hanoi Stock Exchange (HNX). Once its shares are listed on the HNX, the company will pay 2022 dividends at a rate of 20%, including 5% in cash and 15% in shares.

With such positive business results in 2022, Bamboo Capital Group said it has set strong growth targets from 2023-2027 for Tipharco, with revenue and profit growing 19% and 40% per year to VND2.52 trillion ($107.12 million) and VND315 billion ($13.39 million), respectively.

Tipharco was established in 1976 under the name Tien Giang Pharmaceutical Company, and was renamed Tipharco Pharmaceutical Joint Stock Company in February 2006. In March 2022, it officially became a subsidiary of Bamboo Capital Group, listed on the Ho Chi Minh Stock Exchange (HoSE) as BCG, following the latter’s acquisition of a 21% stake.