Vietnam pharma firm Bidiphar’s stock attracts institutional investors

Several organizations and investment funds have continuously registered to buy DBD shares of Vietnamese pharma major Binh Dinh Pharmaceutical Medical Equipment JSC (Bidiphar) since last June.

Bao Minh Securities JSC, listed on the Ho Chi Minh Stock Exchange (HoSE) as BMS, has announced its intention to buy 3 million DBD shares for the first time.

Once the transaction is successful, the company will hold 3.21% of Bidiphar’s charter capital. The transaction is expected to happen from September 12 to October 11.

Bao Minh Securities is led by Phan Tan Thu, a board member of Bidiphar, who currently owns 975 DBD shares.

Two other organizations related to Thu have also been acquiring DBD shares. From June 19 to July 1, Lighthouse Dynamic Investment Fund successfully purchased 170,000 DBD shares, equivalent to 0.228% of Bidiphar’s capital.

From July 8 to August 1, Lighthouse Bond Investment Fund bought 80,000 DBD shares. Thu chairs representative boards of both funds, which had not owned any DBD share earlier.

Bidiphar, established in 1976, is a major pharmaceutical producer based in the south-central province of Binh Dinh. The company is known as the first in Vietnam to research and produce injectable antibiotics, dry powder medicine and injectable cancer treatment drugs.

Currently, DBD shares are trading at around VND40,000-41,000 ($1.67) apiece, down 9% since mid-July. Like many other pharmaceutical stocks, this ticker’s liquidity is not high, with just tens of thousands of shares traded per session.

Who owns Bidiphar?

While many Vietnamese pharmaceutical companies like Hau Giang Pharma, Imexpharm and Domesco saw their stakes acquired by foreign investors, Bidiphar remains one of the few still under domestic investors' control.

Its largest shareholder is the Binh Dinh provincial Development Investment Fund with a 13.34% stake. Swiss investment fund KWE Beteiligungen AG holds over 8% of the company’s charter capital. This fund became a major shareholder in Bidiphar at the beginning of 2023 and continues to buy more shares to increase its ownership.

The company’s 2024 AGM, held in April, revealed several problems related to the election of the board of directors for the 2024-2029 term.

Ta Nam Binh, vice chairman and independent non-executive board member in the previous term, was unexpectedly removed from the nomination list a day before the meeting. This decision drew considerable opposition from shareholders. Binh was reinstated as a candidate and elected chairman.

Moreover, a proposal for distribution of 2023 profits and the business plan for 2024 only received 85.53% of the votes with decision-making rights at the meeting. The reason was that state shareholders wanted to distribute the entire dividend in cash.

In the first half of 2024, the company recorded revenues of VND817 billion ($33.2 million), up nearly 3% year-on-year. Its pre-tax profit was VND166 billion ($6.74 million), down 5.7%; and net profit was VND140 billion, down 2%.

With these results, Bidiphar has fulfilled 41% and 52% of its revenue and profit targets for the year, respectively.