Vietnam pharma giant Hau Giang sets record profit target

Vietnam's leading pharma company Hau Giang reported an after-tax profit of VND1,051 billion ($42.8 million) in 2023, up 6.4% year-on-year, marking a fourth consecutive yearly gain and setting a new record.

Hau Giang Pharmaceutical JSC (DHG Pharma), listed on the Ho Chi Minh Stock Exchange (HoSE) as DHG, reported VND5,015 billion ($204.28 million) in 2023 net revenue, an increase of 7.3% from the previous year, according to its financial statement.

With these results, the company completed 100% of its net revenue plan and its profit was 3% higher than the target set by shareholders.

In the fourth quarter of 2023, its net revenue and after-tax profit reached VND1,535 billion ($65.52 million) and VND261 billion ($10.63 million), up 15.4% and 10.5% respectively, over the same period last year.

The firm attributed the good results to its focus on selling strategic key products, a well-organized distribution network, and good connections with customers.

For 2024, DHG Pharma has increased its revenue target to VND5,200 billion ($211.81 million), but pre-tax profit is set to decrease from VND1,160 billion to VND1,080 billion ($44 million). The plan will be presented to shareholders at this year's annual general meeting.

DHG Pharma is a leading enterprise in the Vietnamese pharmaceutical industry. The company has maintained its profit growth momentum since 2019, driven by exports with strong support from the parent company Taisho of Japan, and the ethical drugs channel (ETC).

In 2022, the ETC channel only accounted for 13% of the company's manufactured goods revenue but enjoyed a rise of 33% compared to 2021. In 2023, the company aimed to increase the proportion to 20%. The export channel contributed more than VND100 billion ($4.07 million) to its revenue in 2022 but recorded an annual growth rate of 20% in five years.

The company currently has two factories with a designed capacity of 7.5 billion units per year. Its main products are antibiotics, pain relievers and fever medicines. In 2022, DHG Pharma started construction of a Betalactam factory that meets Japan/EU-GMP standards. The factory, with total investment capital of about VND700 billion ($28.5 million) and a capacity of 1 billion tablets per year, is expected to begin operations from the fourth quarter of 2024.

Broker Mirae Asset Securities (Vietnam) said it believes this will be the long-term growth driver for DHG Pharma after 2025, helping the company increase the possibility of winning ETC bids and exporting its products to many other markets, especially those in Europe.

However, in the 2023-2024 period, revenue is unlikely to increase strongly because the existing factories have reached over 90% of capacity.

Closing the Monday session, DHG was trading at VND106,100 ($4.32) per share.