I. VIETNAM ECONOMY IN 2017 AND FORECAST FOR 2018

Size: px

Start display at page:

Download "I. VIETNAM ECONOMY IN 2017 AND FORECAST FOR 2018"

Brianna Houston
5 years ago
Views:

2 I. VIETNAM ECONOMY IN 2017 AND FORECAST FOR 2018 CONTENTS I. VIETNAM ECONOMY IN 2017 AND FORECAST FOR 2018 II. VIETNAM PHARMACEUTICAL INDUSTRY IN 2017 AND POTENTIAL DEVELOPMENTS IN 2018 III. IMP SHARES DEVELOPMENT IN IMP shares in the fourth quarter of IMP shares in comparison with other pharmaceutical companies III. IV. IMEXPHARM BUSINESS OPERATION IN Q4 OF Business and financial performance in Q4 of Business operation in 2017 Vietnam economy in 2017 was changing positively. According to Asian Development Bank-ADB, GDP growth was 6.7% in This forecasted rate was increased from 6.3 to 6.7% due the face that export, foreign direct investments were higher than those were expected. This growth is double the world average rate (source: World Bank). The recovery of world economy also contributed to the development of Vietnam economy beside the steady macro factors, low inflation and stable exchange rate. Total value of retail consuming goods and services rose by 10%, compared to last year. World Bank predicted that GDP growth of Vietnam in 2018 might be 6.5%, which was lower than the index of The reason for this decrease was explained that in 2017, Vietnam has some sudden growth such as the recovery of agriculture system after natural disasters in Vietnam has high potentials to reach growth of 6.5% in the context that the world economy is keeping good developed momentum. Nevertheless, World Bank also recommended the lower growth rate if there were some risks from domestic and world economy. In 2018, Vietnam economy was predicted to be going up. However, Vietnam should be diligent, the purposes are to increase income and social benefits for citizens. To reach the goals, Vietnam should resolve bad and public debt issues, exchange rate and national reserved ratio. In 2018, Vietnam economy would be pushed by the actions of the government and the optimism of the investors.

3 II. VIETNAM PHARMACEUTICAL INDUSTRY IN 2017 AND POTENTIAL DEVELOPMENTS IN 2018 III. IMEXPHARM SHARE DEVELOPMENT 1. IMEXPHARM SHARE IN Q4 OF 2017 BMI forecasted the Vietnam pharmaceutical industry in 2017 might reach 5.2 billion USD. Vietnam pharmaceutical industry increased 10%, compared to 2016 and the growth rate would be kept at two digits in the next years. The stable and growing economy in recent years pushed the rise of income per capital and expenditure for healthcare services were going up as well. While IQVIA (IMS Health) forecasted spending for medicines of Vietnamese might be 55 USD/individual, BMI was more optimistic when saying that till 2020, Vietnamese expenditure for medicine was 85 USD/ person in average. However, it could not be denied that the pontential for growth of pharmaceutical was still very high, which created the basement for large M&A deals. In details, up to 2017, there were many multinational pharmaceutical companies invested in Vietnam. They were highlighted by the deal of Abbott to own 51.69% shares of Domesco and Taisho-holding the fourth position in Japanese pharmaceutical industry-becoming strategic shareholder of DHG Pharma. Although pharmaceutical market is the fertile lands to explore, most enterprises showed worries about legal framework, especially the regulations in ETC tenders. Moreover, pharmaceutical industry relies on imported materials also brought trouble for sustainable development in the period from 2018 to About 60% medicines were imported and investment in R&D activities were very limited. When OTC market are more and more competitive, it required enterprises to find a different way to create advantages and take market share. Hence, R&D projects would be considered to improve in Materials sourcing, upgrading machines and equipment for production may attract attentions of companies to invest. However, it is said that the multinational companies are putting more concentrate on distribution system of the local companies to explore the existing customers. In 2018, the competition would fiercer when many distribution enterprises attend retail markets. To compete with foreign companies in the globalization, it required the Vietnam pharmaceutical enterprises invest more in R&D activities for new products and finding material source for manufacturing. According to WHO, Vietnam had local pharmaceutical industry, but materials had to be exported up to 90% made the growth rate of this sector stand at low-average level. China and India are the two nations having highest net export value. Around 5% of revenue of domestic companies spent for R&D, while this figure of foreign corporation was 15%. Universal Health Coverage and cutting medicinal cost are the targets of Ministry of Health, to follow this trend, centralizing tender will approach deeply and largely to save budget. General information Stock code IMP Stock exchange HSX Price range of 52 weeks (VND) 51,000 71,500 Amount of listed shares 42,978,151 Amount of current shares 42,958,351 Fields of operation Pharmaceutical manufacturing and trading Value of market capitalization (as of 11/30/2017) 2, billion VND Room for foreign investors 49% P/E (times) 20.3 P/B (times) 2 Structure of shareholders (Source: Vietnam Securities Depository, as of September 25, 2017) -Vietnam Pharmaceutical Joint Stock Company 22.87% -Foreign Investors 49.00% + Therein: Foreign Professional Investors being significant Shareholders who own more than 5% of shares 24.16% - Special Shareholders (Board of Directors, Board of Managers, Supervisory Board, Chief Accountant, Authorized Discloser), Labor Union 3.60% - Domestic strategic shareholders (not professional investors) 6.74% - Others 17.79% IMEXPHARM PRICE VS VNINDEX IN Q VNIndex movement and IMP price in Q4/2017 Stock market in Q4 recorded the impressive growth of VN Index. At the beginning of the quarter, VNIndex was points, it increased dramatically by 22.2% and ended at points. This was also a highest point of the whole year and rose 46%, compared to the beginning of Blue chip stocks led the markets together with good business performances of many enterprises in Q4 were contributing to develop VNIndex. In 2018, VNIndex is expected to be higher than 1,000 points and open the opportunity to improve rank for Vietnam stock market.

4 IMP shares did not have the positive development as VNIndex. In the 3rd week of November, IMP price surged and peaked at 71.5 thousand VNDs/ share, the highest price of 2017 when the BOD approved the resolution for cash in advance dividend and development plans for However, price of IMP shares declined then and kept stable until the end of Compared to the price 63.4 thousand VNDs/share at the beginning of the forth quarter, IMP price increased slightly about 4.6%. the variance between highest closing and lowest closing price was about 15%. In general, IMP share remained stable at the beginning, reached a peak in the middle and dropped, after that kept steady at the end of the quarter. In comparison with the price: 55 thousand VNDs/share when 2017 started, the IMP share price increased 11 thousand/share when closing at the end of 2017, which was equal to rise 20%. 2. IMP share price compared with other pharmaceutical companies PRICE MOVEMENT OF 5 LISTED PHARMACEUTICAL COMPANIES IMP SHARE TRANSACTION VOLUME IN Q4/2017 Total transacted shares in Q4 of 2017 including put through and order matching was 3.98 million shares. In which, total put through volume was about 2.72 million shares and make up 68% the quantity of shares. The number of order matching shares per day was 19,247. In Q4, investor in Franklin Templeton Group sold 2.32 million shares to VinaCaptilal Group, which raised the ownership of Vinacapital to 5.4%. the number of transacted shared in 2017 was million shares, 39% of this amount was traded by putting through and the rest: 61% was deal by order matching. The price when trading via put through was higher than the one of order matching transactions. (Source:vndirect.com.vn) Share prices of 5 listed pharmaceutical companies have been divided in 2 groups. The group of TRA, DHG, DMC had prices above 100 thousand VNDs/share while IMP and PMC both were in the group having price approximately 70 thousand VNDs/share. However, PMC price in the opening day of Q4 was 76.3 thousand VNDs/share, increased up to 79.4 thousand VNDs/share before coming down at the end of the quarter: At the closing time of the fourth quarter of 2017, share prices of 5 listed pharmaceutical companies as following: - IMP share price went up slightly, compared to quarter-beginning and closed ar 66 thousand VNDs/ share - DHG share price rose at highest rate among 5 companies and price at closing day-29 December was 115 thousand VNDs/share, increase nearly 9,000 VNDs/share with growth rate 8.7% - Similar to the trend of DHG, DMC share price also raised 8,000 VNDs/share and reached the closing price at thousand VNDs/share - TRA had highest share price among 5 enterprises, but the fluctuation between beginning and ending of the quarter was not considerable. In details, closing price at the first transacted day of Q4 was thousand VNDs/share. - PMC was the only one having price decreased among 5 companies in Q4. Closing price on 29 December, 2017 was 68 thousand VNDs/share, dropping nearly 11%, compared to closing price on 02 October, 2017.

5 IV. IMEXPHARM BUSINESS OPERATION IN Q4 OF Business and financial performance in Q4 of 2017 I II STT Chỉ tiêu 2017 % KH Tăng trưởng Business operation results (billion VNDs) 1 Total net revenue and income 1, % 1, % 2 Total net income 1, , % 3 Profit from business operations % 4 Profit before tax and fund and sience distribution % % 5 Profit before tax % 6 Profit after tax % Asset-Liabilities (Billion VNDs) 1 Total asset , % 2 Total shared capital % 3 Total owner s equity % III Liquidity ratios 1 Quick ratio Current ratio IV Khả năng sinh lợi 1 Lợi nhuận trước thuế/doanh thu thuần 12,6% 12,5% 0,1% 2 ROS 9,9% 10,0% -0,1% 3 ROE 10,1% 11,0% -0,9% 4 ROA 8,0% 9,0% -1,0% 5 EPS (đồng) ,7% 6 BV (đồng) % 7 P/E (time) P/B (time) Market price on 31st December (VND) 66,000 55, % At the end of 2017, total net revenue and income of IMP reached 94.1% target, but increased 16.1%, compared to previous year. In the circumstance of strongly competitive market, the growth rate of revenue was higher than the average ratio of the industry (8% according to IMS and 10% followed BMI forecast) proved the best efforts of Imexpharm in the way to improve revenue. However, this result did not meet the expectations of the executive board and shareholders. In 2018, when the capacity of EU-GMP production lines in Binh Duong increases, it will contribute considerably to total revenue of Imexpharm. IMP expected the growth rate of sales would be 18-20% in 2018, copared to is considered to be a challenged year of Imexpharm to reach goals of revenue and profit because of the changes in legal framework, more players in the market and M&A trend happening deeply and largely in pharmaceutical industry. In 2018, Imexpharm continues to fulfill product portfolio of EU- GMP factories for ETC, enlarge OTC as well as find partners for export to foreign markets ETC in 2017 grew 15.8% in comparison with 2016, this rate was lower than the figure: 20% the executive board expected. OTC increased 11.8%, which was much smaller than the growth of 2016; the cause of this issue was OTC in previous years had modest market share, so the growth ratio was high. Imexpharm has been successful in enlarge OTC since 2012 when tender law was changed. Hence, OTC will grow more slowly from Nevertheless, Imexpharm set the growth rate being higher than average rate of the industry. In 2018, Executive board plans to reach 18-20% revenue growth rate, 16-18% profit increased ratio. The liquidity ratios of IMP declined, compared to 2016, but was still in safe zone. Due to the increase of profit in 2017, EPS was improved. In 2017, Imexpharm issued new share to increase equity for two new factories; thus, the profitability ratios such as ROA, ROE dropped slightly. Nevertheless, as forecasting in 2018, capacity explored from Betalactam Binh Duong (certified EU-GMP at the end of 2016) may increase rapidly, which leads to the improvement of profitability ratios.

THANH CONG SECURITIES COMPANY Floor 3&5, Centec Tower, Nguyen Thi Minh Khai, Dis.3, HCMC Phone : + 84 (08) Website:

THANH CONG SECURITIES COMPANY Floor 3&5, Centec Tower, 72-74 Nguyen Thi Minh Khai, Dis.3, HCMC Phone : + 84 (08) 3 827 0527 Website: www.tcsc.vn MONTHLY REPORT AUGUST 2012 Research Department research@tcsc.vn