PHARMA INDUSTRY REPORT 1JUNE 2009 CONTENT HIGHLIGHTS OF VIETNAM
PHARMACEUTICAL INDUSTRYPage 2 The industry in the growth periodPage
2 Dependence on imported materialsPage 3 The majority of drugs are
low-end productsPage 4 Typical distribution networkPage 5
Competition from foreign pharmaceutical corporationsPage 6
Undeveloped R&D in VietnamPage 7 Governmental policiesPage 8
THE TREND OF THE PHARMACEUTICAL INDUSTRY IN 2009Page 9 HAU GIANG
PHARMACEUTICAL JOINT-STOCK COMPANYPage 11 IMEXPHARM PHARMACEUTICAL
JSCPage 13CUU LONG PHARMACEUTICAL JOINT-STOCK COMPANYPage
15MEKOPHAR CHEMICAL PHARMACEUTICAL JSCPage 17VIDIPHAR CENTRAL
PHARMACEUTICAL JSCPage 18 SOME JARGONS:GMP: Good Manufacturing
Practice. GLP: Good Laboratory Practice. GSP: Good Storage
Practice. GMP-WHO: GMP standard of WHO BMI: Business Monitor
International OTC: Non-Prescription drugs Generic drugs:A generic
drug (generic drugs, short: generics) is a drug which is produced
and distributed without patent protection. The generic drug may
still have a patent on the formulation but not on the active
ingredient. (source Wikipedia)Patent drugs : a drug or remedy
protected by a trademark, available without a prescription (Medical
Dictionary) Bao Viet Securities Company 8 L Thi T, Hon Kim, H Ni.
Tel: (844) 3 928 8080. Fax: (844) 3 928 9888. Email:
[email protected]. Website: http://www.bvsc.com.vn. BVSC HCMC Branch
11 Nguyn Cng Tr, Qun 1 6 L Thnh Tn, Qun 1 Tel: (848) 3 821 8564 - 3
914 1992. Fax: (848) 3914 1991. Email: [email protected].
PHARMACEUTICAL INDUSTRY 2 HIGHLIGHTS OF VIETNAM PHARMACEUTICAL
INDUSTRYThe industry in the growth period Increasing consumption:
From 2001 2008, consumption of pharmaceutical products of
Vietnamhad anaverage
growthrateof19.9%/year.Ifthegrowthratein2002was15%
yoyonly,thatin2008was25.5%yoy.Thetotalrevenueofthemarketin2008reached
1.4 billion USD, accounting for 1.6% of the GDP. Domestic drug
consumption from 2001 - 2008Spending on drug per person (USD)
0246810121416181993 1996 1999 2002 2005 2008 Source:Drug
Administration of VietnamSource:Drug Administration of Vietnam
Inrecentyears,Vietnameseconsumersarespendingmoremoneyonmedicalservices,
especially drugs. While spending on pharmaceuticals in 1998 was USD
5.5/person, that in
2008wasUSD16.45/person,athreefoldincreasecomparedto1998.Basedonthe
additional income proportion only, it can be seen that people are
spending more on drugs.
Atpresent,foreachadditionaldollarinincome(aboutVND17,000),Vietnamesepeople
setaside1cent(about170dongs)fordrugs(orabout1%oftheadditionalincome
proportion).Productiongrowth:Withincreasingdemandforpharmaceuticalproducts,companiesin
the industry are expanding their production (output of 2007 rose
26% compared to 2006). Drug consumption and production growth
Source: Ministry of Health
Besidesincreaseinproductionoutput,pharmaceuticalmanufacturingcompaniesarealso
diversifyingtheirproducts.Inthepast3years,therehavebeenabout2,000typesof
0200.000400.000600.000800.0001.000.0001.200.0001.400.0001.600.0002001
2002 2003 2004 2005 2006 2007 2008Total consumption Domestic
production2004006008001.0001.2001.4001.6002001 2002 2003 2004 2005
2006 2007 2008Imported Domestic PHARMACEUTICAL INDUSTRY 3western
drugs registered and licensed in the market each year while there
were only about 700 types of drugs registered in
2003.Atpresent,thereareabout171pharmaceuticalmanufacturingcompanies,including93
companies which manufacture western drugs and those which
manufacture oriental drugs. There are also 6 companies which
manufacture vaccine and healthcare products. Recently,
mostofpharmaceuticalcompanieshaveaccumulatedrelativelysignificantamountof
capitalfromtheincreaseinconsumptionoutputandissuesofshares.Thus,domestic
companies are able to continue to invest in production capacity
enhancement. Increase of standardized companies. At present,
standards in the pharmaceutical sector in Vietnam are categorized
into GMP (Good Manufacturing Practice), GLP (Good Laboratory
Practice) and GSP (Good Storage
Practice).UnderWTOcommitments,bytheendof210,Vietnamesepharmaceuticalcompaniesaresubjected
to meet WTO production standards (GMP-WHO standards). Otherwise,
they will
beobligedtoceaseproduction.By2008,52%ofpharmaceuticalcompanies(including
thosemanufacturingnewandorientalpharmaceuticals)metthestandardsofGMP-WHO;
in which 51% and 63% of companies met the GLP and GSP standards. In
fact, Vietnamese
companiesonlystartedtopayattentiontothesestandardsinthepastfewyearsandare
making their best efforts to enhance their competitiveness to
survive and develop.Number of companies reaching GMP WHO
standards18253141455766758902040608010096 - '00 2001 2002 2003 2004
2005 2006 2007 2008 Source: Drug Administration of Vietnam
Dependence on imported materialsDuetoweaknessesof chemical, 90% of
the materialsforproduction of westerndrugs are
imported.Themaintypesofimportedpharmaceuticalmaterialsareantibioticsand
vitamins, which account for more than 80% of the import
value.ChinaandIndiaaretwobiggestexportersofpharmaceuticalmaterialsintoVietnam,
accounting for 25% and 21% respectively in 2008. As Vietnamese
companies at present are
mainlyproducingcommondrugs,theyareusingmanytypesofcheappharmaceutical
materials imported from the two countries. PHARMACEUTICAL INDUSTRY
4Pharmaceutical materials exported to Vietnam Types of imported
pharmaceutical materials Source: Trade Review magazine Source:
Trade Review magazine With too much dependence on imported
materials, the Vietnam pharmaceutical industry incurs a lot of
risks, particularly risks from exchange rate difference, price
swings, material quality and
trading.Risksfromexchangeratedifference.In2008,mostofpharmaceuticalcompanies
incurredlossesduetounexpectedexchangeratedifference.Asfaraswecansee,
pharmaceutical companies at present have not got specific plans to
prevent risks from exchange rate differences in the future.
Risksfrommaterialpriceswings.In2008,thepricesofmainimported
pharmaceuticalmaterialsincreased,forexamplethepriceofantibioticswentup2%
onaverage(particularlyCephalexinBphadanincreaseupto11.7%inimported
price),thatofvitaminsincreasedby34%andthatofmaterialsfortheproductionof
pain-reliefandantipyreticdrugsincreasedby80%.Suchincreaseswerethereasons
for significant adjustments in drug prices in the market last
year.Price swings of materials in 2008 compared with 2007 Source :
Trade Review Magazine Risks from quality of pharmaceutical
materials. Pharmaceutical materials imported
fromChinainvolvehiddenrisksintermsofquality.However,theseriskscanbe
prevented if domestic companies follow closely quality control
processes. The majority of drugs are low-end products
Accordingtointernationalpractices,therearetwowaystocategorizepharmaceutical
products:Onthebasisofusageinstructions,drugsarecategorizedintoOTCdrugs(without
dosage,mainlysoldatretaildrugstores)andprescriptiondrugs(drugswith
24%13%5%5%58%AntibioticsVitaminsAntipyretic, pain-relief,
antipasmodicAnti-inflammatory drugOthers21%12%12%11%11%5%5%25%China
IndiaSingaporeHolland SpainOthers ItalyAustria 2%
34%80%AntibioticsVitaminsAntipyretic,pain-relief, antipasmodic
PHARMACEUTICAL INDUSTRY 5prescription delivered into hospitals and
medical centers). However in Vietnam, there
arelittledifferencesbetweenOTCdrugsandprescriptiondrugsasprescriptiondrugs
arebeingsoldwidelyinthemarket.Thus,wetemporarilydividedrugsintotwo
categorizes: drugs distributed to hospitals and drugs distributed
to the market. In 2008,
spendingondrugsinhospitalswasVND12.322billion(correspondingtoUSD760
million), accounting for about 50% of the total value of drugs in
the market.On the basis of pharmaceutical compounding patents,
pharmaceutical products are
dividedintogenericdrugs(thosewhosepatentsareexpired)andpatentdrugs(those
whosepatentsareineffect).Atpresent,thedomesticpharmaceuticalindustryis
producing
genericdrugsoflowvalues,accountingfor69%ofthetotalmarketshare,
particularlyantibioticsandgenericdrugssuchasvitamins,pain-reliefdrugsand
antipyretic drugs.Typical distribution
networkThepharmaceuticalindustrygetsaccesstoconsumersthroughtreatmentdistribution
system and commercial distribution network.
Treatmentdistributionnetwork.Thetreatmentnetworkincludeshospitalsandother
treatment units of different levels. The total number of medical
examination and treatment
unitsinVietnamin2007was13,438.Almostallpharmaceuticalcompanieswishto
promotethisdistributionchannelbecauseofitslargeconsumptionquantity.
Pharmaceuticalcompaniesgetaccesstocustomersandexpandtheirmarketsharesby
measures such as giving commissions or discounts to doctors and
pharmacists.
However,besidestheadvantagesofhighturnoverthatthisdistributionchannelbrings,
domesticpharmaceuticalcompaniesarealsofacingwithdifficultiesthatsuchdistribution
channel entails.
Firstly,sellingthroughhospitalsoccupiesahighamountofworkingcapitalof
pharmaceutical companies because hospitals normally settle payment
at the end of the
year.Secondly,foreignpharmaceuticalcompanieswithfinancialadvantagesgiveahigh
commissionanddiscounttothetreatmentnetwork,creatingconsiderablecompetition
to domestic companies.Drug distribution structure in hospitals in
2008Quantity of units in the treatment network Year20062007
Hospitals903956 Localgeneral practice surgeries847829 Treatment and
functional recovery hospitals5151 Medical aid stations of communes,
districts10,67210,851 Medical aid stations of organs and
companies710710 Other units4941 Total13,23213,438 Source: Drug
Administration of VietnamSource: Ministry of Health
0%20%40%60%80%100%Value QuantityImported Domestic PHARMACEUTICAL
INDUSTRY 6In fact, domestic drugs account for 61% of the selling
quantity; however, it only takes 15% of the consumption value in
the treatment distribution network. It shows that the domestic
pharmaceutical structure mainly contains common goods with low
value. As such, in order
tomaintainthequantityproportionandheightenthevalueproportionofpharmaceuticals
soldthroughhospitals,Vietnamesepharmaceuticalcompanieswillhavetomakegreat
effort to compete with foreign
companies.Commercialdistributionnetwork.Thecommercialnetworkincludesbranches,agents,
distributors and drugstores. At present, domestic pharmaceutical
companies are trying their best to promote the commercial
distribution channel in order to reduce the dependence on
thetreatmentdistributionnetworkwhichisfacingintensecompetition.Thisdistribution
networkmainlyconsistsofdomesticdistributorsmeanwhilethereareonlythreeforeign
distributors in the market, including Zeullig Pharma, Diethelm and
Megaproduct.Distribution structure in the commercial network of
2008Commercial distribution network structure Year200520062007
Commercial companies680800800 Import export companies798990
Production companies174178180 Foreign suppliers270320370 Retail
units29,54139,31939,016 Source: Drug Administration of
VietnamSource: Ministry of Health
Withthecommercialdistributionchannel,workingcapitalisturnedoverfasterthanksto
shorterdebtordays.Besides,productbrandnamecanbeeasilyrecognizedparticularlyin
the context that domestic companies are mainly producing generic
drugs.However,pharmaceuticalcompaniesarealsofacingwithchallengeswhentheywishto
develop strongly this distribution
channel.Toexpandtheirbranches,pharmaceuticalcompanieshavetobuildupwarehouses
meetingGSPstandards.Thisrequiresfinancialcapacityofcompaniesduetolarge
investment expense, about VND 5
billion/branch.VietnamatpresenthasasmallnumberofdrugstoresandagentsreachingGPP
standards. From 2011 on, those which fail to meet the standards
will not be permitted to sell prescription drugs. Competition from
foreign pharmaceutical corporations
Vietnampharmaceuticalmarketwithdensepopulationandlowdomesticproduction
capacity is a very attractive market for foreign pharmaceutical
companies.
Well-knownpharmaceuticalcorporationssuchasSanofiAventis,GSK,Servier,Pfizer,
NovatisGroup,etchavemadetheirpresenceinVietnamandcompletelycapturedthe
0%20%40%60%80%100%ValueQuantity DomesticImported PHARMACEUTICAL
INDUSTRY
7domesticmarketofprescriptiondrugsaswellasexpandedthemarketshareofgeneric
drugs.
MostofforeignpharmaceuticalcorporationsoperateinVietnamintheformof
representativeofficesandauthorizedrepresentativesbeingdomesticpharmaceutical
companies. These units will on behalf of these corporations import
drugs and have foreign distributors distribute to retail
drugstores. 10 biggest drug exporters to VNRevenue of several
pharmaceutical companies in VN
1058250413734272523143FranceIndiaSouth
KoreaSwitzerlandGermanySingaporeThailandHongkongUnited
KingdomAustralia35.33321.17618.93017.21416.2439.30240.384Sanor-AventiscorGSK
GroupServier GroupPfizer GroupNovartis GroupDHG
PharmaDomescoSource: Trade Review magazine Source: Trade Review
magazine
ForeignpharmaceuticalcorporationsacquirethemarketsharesinVietnamthanksto
advantages of financial capabilities and products.
Strongfinancialresourcesenablethesecorporationstomakehighcommissionsto
hospitals and distributors as well as to sponsor medical and
pharmaceutical schools and scientific
conferences.Foreignimportedproductsarehighinvalueandvariousincategories,rangingfrom
common drugs to specialty drugs, meanwhile domestic drugs are
mainly common. Kinds of imported drugs Undeveloped R&D in
Vietnam Pharmaceutical chemistryindustry hasbeen underinvested:
Pharmaceutical chemistry
technologiesinVietnamarecomparativelyoutdated.TheGovernmentofVietnamhas
drawn out plans to develop the pharmaceutical chemistry industry in
order to meet 40% of the demand of antibiotics substance for
domestic production in 2015. However, according 10%11% 8%9%5%
38%18%AntibioticsNutritional transform Cadiovascular Antipyretic,
pain-relief, antipasmodic Disgestive Metic - analetic Others
PHARMACEUTICAL INDUSTRY 8to our research, several projects on
pharmaceutical material manufacture (Celphalosphorin) of the
Ministry of Industry have come to a standstill due to ineffective
operations. Besides such issues as technologies, the pharmaceutical
chemistry industry is also facing a number of difficulties.
Financialissues. Productioncost ofanewactive elementis ratherhigh,
about more
than100billiondongs.Meanwhile,thebudgetoftheStateandothercompaniesfor
research is rather limited.Legal issues. At present, the legal
framework for research and experiments of drugs on
humanbeingsinVietnamisincomplete,causingentanglementstotheexperimental
operations.Thus,wethinkthattheabovetargetsetbytheGovernmentisunlikelytobeachieved
according to the projected schedule. Development of new products of
domestic pharmaceutical companies is R&C only
Atpresent,Vietnampharmaceuticalindustryisatlevel2.5outofthetotal5levelsof
technological advance. At this stage, almost all of drugs produced
are generic types (those whose technological patents have expired).
In this context, we temporarily call the research and production of
new drug products of Vietnam R&C (research and copy).
Statistics on expenses of a number of leading companies below have
reflected the fact that there are lots of limits in R&D
activities of the pharmaceutical industry. CompanyDHGIMPDCL %
research expense/revenue1%5%2% Number of research staff332525
Source: Pharmaceutical companies Governmental policies Price
control: Drugs are a sensitive type of goods with remarkable
impacts on the society. Thus, they are put in the list of goods
under price control by the Government of Vietnam.According to
regulations of the Drug Administration of Vietnam, companies are
subjected to register the selling prices of drugs at the Drug
Administration on the basis of their annual
productioncosts.Iftherearestrongpriceswingsofinputmaterials,drugmanufacturing
companiesareentitledtoapplytothelocalhealthcaredepartmentforadjustmentsofthe
prices. However, foreign imported drugs are not regulated by this
price control policy.In 2008, with strong price volatility of
pharmaceutical materials, some domestic companies
wereforcedtoincreasethepricesofdrugsabovetheregisteredfigures.Inmanycases,
functionalauthoritieshavemadeslowresponsestomarketdevelopmentsandpartly
affected the operating results in 2008 of domestic pharmaceutical
companies.Policiesonpharmaceuticalindustrydevelopment.TheGovernmenthasissuedthe
schemeDevelopingthepharmaceuticalindustryandbuildingthemodelofdrugsupply
network of Vietnam in the period of 2007 2015 and vision to 2020 in
order to enhance
thecapacityofthedomesticpharmaceuticalindustry.However,thecontentoftheproject
mainly focuses on the targets and tasks but has not brought about
specific support policies PHARMACEUTICAL INDUSTRY
9forpharmaceuticalcompanies.Thus,inthenearfuture,inouropinion,itwillbedifficult
forpharmaceuticalcompaniestohavebreakthroughsespeciallyinresearching
pharmaceutical materials and developing new products. The trend of
the pharmaceutical industry in 2009 Minimum growth of the
pharmaceutical industry as of 9.6% this year We forecast that the
minimum growth rate of the pharmaceutical industry in 2009 is 9.6%
on the basis of below assumptions: Vietnamese population is 87.9
million in 2009 (IMF) The proportion of additional expenditure on
medical services per added income is still maintained at 1.6% as in
2008.Targets200420052006200720082009E GDP/head according to PPP
(USD) 1,9492,140 2,3572,5892,7742,858 Growth rate10%10%10%7%3%
Spending on drugs/person (USD) 8.6 9.9 11.2 13.4 16.5 17.8 Growth
rate15%14%19%23%8% Total spending on drugs (tr USD) 705 820
9481,1471,428 1,565 Growth rate 16.2%15.6%21.0%24.5%9.6% Source:
IMF, Ministry of Health, BVSC The project to expand and build new
plants Almost all big pharmaceutical companies have developed plans
to expand their production
in2009and2010suchasHauGiangPharmaceutical,Imexpharm,CuuLong
Pharmaceuticals and Vidiphar. With new plants, the pharmaceutical
industry can maintain the above growth rates in coming
years.CompanyInvestment capital (billion dongs) ProgressExpected
time of completion Hau Giang Pharmaceutical 252 Applying to the
Ministry of Health for approval of design scheme QII/2011
Imexpharm110Construction of parapets finishedQIV/2009 Cuu Long
Pharmaceutical 150Machineries installed, test-run in JuneJuly 2009
Vidiphar120Plants are under constructionEnd of 2010 Source:
Pharmaceutical companies
Pharmaceuticalproductionandtradingcompaniesareactiveinbroadening
commercial distribution
network.Inordertoachievetherevenuegrowthtargetsaswellasactivelyseekandexpandthe
marketshares,manypharmaceuticalcompanieshaveputforwardplanstoexpandtheir
distribution networks, upgrade distribution agents which reach GPP
standards or construct
largewarehouseswhichreachGSPstandards.Thiswillfacilitatethedistributionof
common drugs such as pain-relief, antipyretic and functional food
to customers. PHARMACEUTICAL INDUSTRY 10CompanyInvestment capital
for a branch/warehouse (billion dongs)Current number of branches
Hau Giang Pharmaceutical50 (branch)25 Cuu Long Pharmaceutical50
(branch)15 Domesco62 (3 new warehouses)7 IMP10 billion (upgrading
Can Tho and Cuu Long 1 branches)9 Source: Pharmaceutical companies
HAU GIANG PHARMACEUTICAL JOINT-STOCK COMPANY PHARMACEUTICAL
INDUSTRY 11SHARE INFORMATION Ticker:DHG Trading bourse:HOSE 52-week
low:94.5 52-week high:155.0 Capitalization value (VND billion):
2,319.19 Number of outstanding shares: 19,993,070 10-day average
trading volume: 27,050 Dividend payout ratio:25% OWNERSHIP
INFORMATION State-owned44.28% Foreign owned43.60% Other12.12% PRICE
PERFORMANCE Highlights.
Widedistributionnetwork.Comparedtoothercompaniesinthesame industry,
the distribution network of DHG is among the strongest ones. Number
of branches/ drugstores of the company Number of distributing
agents Representative office DHG22201 IMP93 DMC775 Source: DHG,
IMP, DMC
Atpresent,inordertoenhanceoperatingefficiencyofthebranches,theCompany
hasshiftedfromthepatternofbranchestothepatternofsubsidiarycompaniesto
enablethemtoimplementthecontractssignedwithdrugstoresandtostrengthen
market access operations at the same time. Large and modern
production scale. At present, DHG is still leading in terms of
production scale in the pharmaceutical industry.(VND
billion)DHGIMPDMCMKPDCL 2008 production revenue 1.431534481500242
Source: Companies Sales policies. DHG is the manufacturer with high
sales commissions/discount
ratiosforagentsandtreatmentnetwork(sellingexpense/netrevenueratio
often stands at about 35%). Thanks to this policy, DHG can maintain
its large market share and achieve a high growth rate in the recent
period.Performance in
2008.In2008,inthecontextofmarketfluctuations,DHGchangeditsproduct
structure in order to cut down on the groups of products with low
revenue and grossprofitmargin.Althoughthe outputin 2008fell by 12%,
thanksto such
changes,revenuein2008stillreachedagrowthrateof19%andgrossprofit
still reached a growth rate as of 53% compared to 51% in 2007. 2009
prospect.Itisexpectedthatrevenuein2009wouldbeabout1600billiondongsand
profit before tax margin proportion would be 10%.In 2009, DHG is
projected to launch from 30 to 40 new products, including 8
productsbeingfunctionalfood.Theotherswillbeantibiotics,pain-relief
and antipyretic drugs with more advanced characteristics than the
present products of DHG.The plant in Tra Noc will be completed at
the end of 2010 and can be brought
intooperationin2011withacapacityof3billiontablets/year.Thetotal
expected investment expense is about 200 250 billion dongs.J J A S
O N D 2009 A M
J5000010000015000050000100000150000100110120130140150100110120130140150DHG
PHARMACEUTICAL INDUSTRY 12Valuation. We assume that revenue growth
rate of the current plant is 6%/year. The new plant will come into
operation in 2011 and reach 80% of the capacity in 2013.With the
WACC as of 15.5%, from 2009 to 2013 and 13% from 2014, according to
our calculation, the intrinsic value of DHG shares is 100,445
dongs.BASIC FINANCIAL INDEXESOPERATING EFFICIENCY INDEXES Unit:VND
billion200620072008Index200620072008 Revenue 868,192 1,269,280
1,513,172Revenue growth (%)56,7%46,2%19,2% Cost of goods
sold402,747 627,628 717,698Profit after tax growth
(%)57,2%82,5%7,8% Profit after tax69,648 127,093137,001Gross profit
margin (%)54%51%53% Total asset482,847942,2091,133,478Net profit
margin (%)8,0%10,0%9,1% Current asset291,128289,818 361,434ROA
(%)14,4%13,5%12,1% Non-current asset153,297268,421 294,838ROE
(%)41%20%18% Owners equity603,534580,449 738,033EPS8,706 6,3556,860
Liabilities170,441 651,577 753,295Book value21,305 32,57937,720
PHARMACEUTICAL INDUSTRY 13 IMEXPHARM PHARMACEUTICAL JSC SHARE
INFORMATION Ticker:IPM Trading bourse:HOSE 52-week low:48,7 52-week
high:124,0 Capitalization value (VND billion): 707.76 Number of
outstanding shares:11.602.620 10-day average trading volume: 29.531
Dividend payout ratio:20% OWNERSHIP INFORMATION State-owned26,04%
Foreign owned41,42% Other32,35% PRICE PERFORMANCE Highlights
Technologicaladvantages.IMPatpresentisthesoleVietnamese
enterprisemeetingtheGMPEUstandardsinpharmaceutical
production.Productionofhighvaluedrugs.Thankstotechnological
advantages, the Company can produce high value drugs with selling
priceshigherthanotherdomesticpharmaceuticalmanufacturing
companiesProduction expansion in the coming period
IMPisbuildinganewplantforCephalosphorinproductioninBinh
DuongprovincewhichisexpectedtocomeintooperationinQ4/2009 with a
total investment capital as of approximately 110 billion dongs.It
is expected that at the maximum capacity, revenue will reach 400
500 billiondongs;however,inthefirsttwoyears,theexpectedrevenuewill
reach about 200 250 billion dongs.Weaknesses in the distribution
network. The distribution network of
IMPisnotasstrongwithonly3agentsincomparisonwithDHG and DMC with 20
and 75 agents respectively. Performance in 2008
Revenuein2008was561.8billiondongs,a24%growthcompared to 2007 thanks
to increased output.Revenue structure of the Company is divided
into two parts: licensed drugs whose production patents are
obtained from Sandoz and drugs
thecompanyproducesitself.In2008,revenuefromlicenseddrugs
accountedfor22%ofthetotalrevenue,comparedto27%in2007.
Thisreductioninrevenuefromlicenseddrugscontributedto increase gross
profit margin.2009 prospect
Itisestimatedthatrevenuewillincrease1012%mainlythanksto output
increase. From 2010, the new plant is expected to contribute VND
200 billion to the companys revenue and in 2012, revenue can go up
2 times.
Valuation.Weforecastthatrevenuegrowthratefor2009and2010ofthecurrent
plant is 12%/year. This figure has taken into account the expected
revenue of 200 billion dongs in 2010 from the new plant. (50% of
the capacity is used). According to our calculations, WACC from
2009 to 2013 is 15% and that from2014is 12%.Giventhese
figures,theintrinsic value of IMPshares J J A S O N D 2009 A M
J500001000005000010000050607080901001101205060708090100110120IMP
PHARMACEUTICAL INDUSTRY 14is 87,885 dongs/share. BASIC FINANCIAL
INDEXESOPERATING EFFICIENCY INDEXES Unit:VND
billion200620072008Index200620072008 Revenue 525,406 451,602
561,844Revenue growth (%)55.8%-14.0%24.4% Cost of goods sold367,260
258,572 319,809Profit after tax growth (%)59.6%29.0%14.2% Profit
after tax42,276 54,51862,235Gross profit margin (%)30%43%43% Total
asset 304,671 568,426 597,082Net profit margin (%)8.0%12.1%11.1%
Current asset 260,420469,910 398,684ROA (%)13.9%9.6%10.4%
Non-current asset 44,250 98,516 198,398ROE (%)18%11%12% Owners
equity 70,495 70,874 77,283EPS 5,033 4,6765,342 Liabilities 234,176
497,552 519,799Book value27,878 42,67244,616 PHARMACEUTICAL
INDUSTRY 15CUU LONG PHARMACEUTICAL JOINT-STOCK COMPANY SHARE
INFORMATION Ticker:DCL Trading bourse:HOSE 52-week low:24,6 52-week
high:64,0 Capitalization value (VND billion): 505.22 Number of
outstanding shares: 9,715,848 10-day average trading volume: 16,566
Dividend payout ratio:20% OWNERSHIP INFORMATON State-owned37.07%
Foreign owned18.68% Other44.25% PRICE PERFORMANCE Highlights. The
dominating producer in the market of hard-gel
capsules.DCLandSuheungaretwobigproducersofhardcapsulesinVietnam.In2008,
DCLwon30%oftheoveralldomesticmarketsharewhileSuhungjustentered
Vietnam market.DCL has two hollow capsule manufacturing plants with
a current capacity of about
2billionunits/yearandadesignedcapacityof2.5billionunits/year.Withthe
operation of the new Capsule II factory, DCL is expected to gain
50% - 60% of the domestic market share. One of the two big
suppliers of
syringes.Atpresent,DCL(withthetrademarkofVikimco)andVinahankookaretwobig
suppliers of syringes. While Vinahankook is dominating the northern
market share,
Vikimcoiscapturingthesouthernmarketshare.InHoChiMinhcity,80%of
hospitals use Vikimcos products.Limitations in development of
western drugs
Focusingonmedicalgoods,DCLisnotdominatinginwesterndrugproduction
although revenue from western drugs accounted for 50% of total
revenue in 2008.
ItisexpectedthatthenewbetalactamplantwillcomeintooperationinQ3/2009
with maximum revenue of 150 billion dongs/year.Risks of competition
from Suheung
SuheungistakingtheinitiativeinexpandingtheirmarketshareinVietnamwith
the increase of their production output to the corresponding figure
of DCL.In the years to come, supply surplus can happen if both DCL
and Suheung produce at their maximum capacity. Performance in 2008.
DCL had significant changes in 2008. Revenue had a growth rate of
34% thankstoa50%growthinnewdrugproductionin2008comparedto
2007.Revenuefromcapsulesalsohadanincreaseof20%comparedto
2007,whichwaspartlyowingtothelaunchofthenewproductrangeof silver
capsules. In2008,theCompanydidnotrecordtheinterestofloanpaidtobanks
because it was capitalized into the plants value. 2009 prospect. In
2009, revenue of the Company is estimated at 650 billion dongs,
including 300
billiondongsfromdrugs,145billiondongsfromcapsules,55billiondongsfrom
medical equipments and the rest from commercial goods.
Valuation.OnthebasisoftheWACCof13%fortheperiodof2009-2012and11%from
2008 N D 2009 M A M
J50000100000150000200000250000300000500001000001500002000002500003000002530354045505525303540455055DCL
PHARMACEUTICAL INDUSTRY 162013, our valuation result for the
intrinsic value of DCL shares is 66,336 dongs. BASIC FINANCIAL
INDEXESOPERATING EFFICIENCY INDEXES Unit:VND
billion200620072008Index200620072008 Revenue 346.497 355.490474.667
Revenue growth (%) 110%3%34% Cost of goods sold 294.127
267.770350.154 Profit after tax growth (%) 22%295%24% Profit after
tax 10.470 41.33751.151 Gross profit margin (%) 15%25%26% Total
asset 266.073 399.541544.037 Net profit margin (%) 3%12%11% Current
asset 127.651 257.908314.809 ROA (%) 4%10%9% Non-current asset
138.422 141.634229.228 ROE (%) 15%17%18% Owners equity 196.904
159.536265.636 EPS 1,870 5,1035,276 Liabilities 69.169
240.005278.401 Book value 12,352 29,63028,716 PHARMACEUTICAL
INDUSTRY 17 MEKOPHAR CHEMICAL PHARMACEUTICAL JOINT-STOCK COMPANY
SHARE INFORMATION Ticker: Trading bourse: 52-week low: 52-week
high: Capitalization value (VND billion): Number of outstanding
shares: 10-day average trading volume: Dividend payout ratio:
OWNERSHIP INFORMATION State-owned Foreign owned Other PRICE
PERFORMANCE Highlights.
Beingtheleadingcompanyinwesterndrugproductionanddistribution,
especially in fusion products.Holding about 7% of the drug market
share of Vietnam Strengths.
Mekopharatpresentisoneoffewdomesticcompaniesproviding
materialsforproducingbetalactam(amoxicilline)andperfusionand
distributing mainly through state-owned hospitals.
Mekopharsatisfiesallthestandardsofdrugproduction,distributionand
storage(GMP,GSPandGLP).MKPsplantisamong75onesmeeting GMP standards
out of a total of 180 drug production plants in Vietnam.
Weaknesses.Mekopharmainlydistributesitsproductsthroughhospitalsandanumber
oftraditionalpartners.Therefore,marketaccessibilityoftheCompanyis
rather limited.Future projections.
Atpresent,MKPhasdelayedtheprojectoncontructionofGMPplantin Binh
Duong province in an area of 41,139.2 m2. The plant is expected to
come into operation in 2012, 2 years behind schedule.
MKPwillalsocooperatewithVinaCapitalintheinvestmentprojectof
officebuildingforleaseatno.5NgoThoiNhiemstreet,Dist.3,HoChi Minh
city. It is expected that construction will start at the middle of
2009. InFebruary2009,MPKopenedtheresearchcenterforapplicationand
supply of stem cells.
Intheprojectionforthenext5years,MPKwillestablishtheresearch center
for cancer treatment named Meko CTL. BASIC FINANCIAL
INDEXESOPERATING EFFICIENCY INDEXES Unit:VND
billion200620072008Index200620072008 Revenue346,497355,490
474,667Revenue growth (%)109.5%2.6%33.5% Cost of goods sold 294,127
267,770 350,154 Profit after tax growth (%) 22.1%294.8%23.7% Profit
after tax10,470 41,33751,151Gross profit margin (%)15%25%26% Total
asset266,073399,541 544,037Net profit margin (%)3.0%11.6%10.8%
Current asset127,651257,908314,809ROA (%)3.9%10.3%9.4% Non-current
asset138,422 141,634 229,228ROE (%)15%17%18% Owners equity 196,904
159,536 265,636EPS1,870 5,1035,276
Liabilities69,169240,005278,401Book value12,35229,63028,716
PHARMACEUTICAL INDUSTRY 18 VIDIPHAR CENTRAL PHARMACEUTICAL JSC
SHARE INFORMATION Ticker: Trading bourse: 52-week low: 52-week
high: Capitalization value (VND billion): Number of outstanding
shares: 10-day average trading volume: Dividend payout ratio:
OWNERSHIP INFORMATION State-owned Foreign owned Other PRICE
PERFORMANCE Highlights. Vidipha mainly produces antibiotics which
bring 40% of total revenue and vitamins which are focal products of
the Company.
Revenuefromdrugproductionreaches200billiondongs/year;profit/net
revenue ratio is approximately 13.6%/year.
TheCompanyhasanumberoffactoriesmeetingthestandardsofGMP-ASEAN,particularly:Non-Betalactamtabletproductionworkshop,
Betalactamtabletproductionworkshop,andworkshopforproductionof
liquid injectable drug, eyewash, syrup and ointment.Strengths
Awidedistributionnetworkindifferentprovinces,particularlythrough
local pharmaceutical companies.
Providingawiderangeofwesterndrugsinthemarket,whichfacilitates
Vidiphar in meeting various market
demands.Havingtheintentionofexpandingtheproductionofpharmaceutical
products.Weaknesses. Lot of shortcomings in the distribution into
treatment networks.
Dueattentionhasnotbeenpaidtoresearchanddevelopmentofnew products.
Future projections Construction of the new plant in Binh Duong
province with an investment capital of 120 billion dongs started on
February 2009 and it will come into operation in 2011 to replace
the plant in Ho Chi Minh City.
In2009,itisprojectedthatrevenuewillbe230billiondongsandprofit will
be 31 billion dongs. Revenue in 2010 and that in 2011 are
forecasted to reach 280 billion dongs and 320 billion dongs
respectively. BASIC FINANCIAL INDEXESOPERATING EFFICIENCY INDEXES
Unit:VND billion200620072008Index200620072008 Revenue
170.458191.443 206.952Revenue growth (%)n/a12%8% Cost of goods
sold135.572148.668 163.049Profit after tax growth (%)n/a10%10%
Profit after tax19.43925.529 28.188Gross profit margin (%)20%22%21%
Total asset162.748176.614 190.909Net profit margin (%)11%13%14%
Current asset126.051142.847 151.920ROA (%)12%15%15% Non-current
asset36.69733.767 38.989ROE (%)14%16%17% Owners equity21.99815.184
21.162EPS3.888 4.2554.698 Liabilities140.750161.431 169.747Book
value28.150 26.90528.291 PHARMACEUTICAL INDUSTRY 19APPENDIX 1:
SEVERAL COMPARATIVE INDEXES OF PHARMACEUTICAL COMPANIES IN
ASIACHINA Company name Code (Bloomberg) Price Market capitalization
(USD) P/EPEG EV/EBITDA (T12M) P/B ROE (T12M) Jiangsu Hengrui
Medicine Co600276.SS5,833.015.734.52848,751,129,9510,3423,29 Sanjiu
Medical &
Pharmace-A000999.SZ2,312.264.991.48831,021,1520,334,8416,73 Harbin
Pharmaceutical Grp-A600664.SS2,29886.020.99222,60N.A.214,8212,45
Shanghai Fosun
Pharmaceutica600196.SS1,942.402.329.85626,02N.A.604,2418,09 Beijing
Double Crane
Pharm-A600062.SS3,491.663.948.54424,071,3220,684,7921,73 Zhejiang
Medicine Co Ltd-A600216.SS2,741.230.931.072143,85N.A.36,019,686,77
Beijing Sl Pharmaceutical
-A002038.SZ51.242.508.54463,020,8177,8215,4127,57 Zhejiang Hisun
Pharmaceutica600267.SS2,41.078.976.51237,751,2517,814,8713,58 North
China Pharm Co-A600812.SS1,451.486.332.032167,862,1318,538,154,94
Guangdong Kangmei
Pharm-A600518.SS1,861.423.216.00033,06N.A.32,154,28,41 Harbin
Pharmaceutical Grou-A600829.SS2,29886.020.99222,60N.A.214,8223,82
Livzon Pharmaceutical
Inc-B200513.SZ1,34703.396.9925,52N.A.11,621,4430,44 Zhejiang Huahai
Pharmaceut-A600521.SS2,08621.455.10428,400,9917,583,914,65 Tonghua
Dongbao Pharmaceut-A600867.SS2,34860.892.28876,05N.A.58,643,955,46
Shenzhen Accord
Pharmaceut-B200028.SZ1,07683.285.44016,88N.A.26,444,3628,57
Northeast
Pharmaceutical-A000597.SZ3,031.012.580.992132,59N.A.27,77,15,15
Guangzhou Baiyushan
Pharma-A000522.SZ1,05491.884.83223,27N.A.18,314,2520,46 Zhejiang
Hangzhou Xinfu Phar002019.SZ1,39264.966.35243,09N.A.18,383,177,37
Kunming Pharmaceutical
Corp600422.SS0,91284.899.64867,01N.A.26,953,395,19 China
Pharmaceutical Group1093 HK0,4611.822.0805,960,023,621,1923,56
United Laboratories3933 HK0,32386.981.9204,720,395,041,1227,06
Extrawell Pharmaceutical858
HK0,25581.930.496N.A.N.A.464,2314,98-4,46 Sino
Biopharmaceutical1177 HK0,15341.684.7689,740,26N.A.1,2713,67
Shandong Luoxin Pharmacy-H8058
HK0,28168.278.3206,280,21N.A.2,3445,03 Wuyi International
Pharmaceu1889 HK0,07125.713.6963,22N.A.N.A.0,6120,52 Tongjitang
Chinese Medic-AdrTCM US3,69124.860.09618,950,79N.A.0,693,7 MALAYSIA
CCM DUOPHARMACCMD MKEquity0,5678,78M10,541,296,042,2222,39 APEX
HEALTHCAREAPEX MK Equity0,3425,25M6,29N.A.5,070,6510,7 YSP
SOUTHEAST ASYSP MK Equity0,2416,59M4,87N.A.N.A.0,4910,36 INDONESIA
MERCK TBK PTMERK IJ Equity2,6759.845.5447,27N.A.3,982,1932,47 KALBE
FARMAKLBF IJ Equity0,05542.671.55210,680,555,421,7817,71 DARYA
VARIA LABODVLA IJ Equity0,1265.456.0649,71N.A.5,491,5616,97 TEMPO
SCAN PACIFTSPC IJ Equity0,04167.188.4806,850,692,880,9513,84
PYRIDAM FARMAPYFA IJ Equity0,012.680.4266,11N.A.N.A.0,45N.A.
BRISTOL-MYERSSQBB IJ EquityN.A.N.A.N.A.N.A.N.A.N.A.46,18 MERCK TBK
PTMERK IJ Equity2,6759.845.5447,27N.A.3,982,1932,47 VIETNAM Hau
Giang Pharmaceutical JSCDHG VN
Equity6,01120.070.80813,81N.A.N.A.2,8920,36 Domesco Medical Import-
ExportJSCDMC VN Equity2,2530.579.9088,08 N.A. N.A.1,1414,41
Imexpharm Pharmaceutical JSCIMP VN Equity335.011.4729,84 N.A.
5,771,1812,25 Cuu LongPharmaceutical JSCDCL VN
Equity1,0419.838.4706,78 N.A. 6,231,2519,77 Traphaco JSCTRA VN
Equity2,2918.302.4486,95 N.A. 5,121,24N.A. Ha TayPharmaceutical
JSCDHT VN Equity1,124.597.9616,98 N.A. N.A.0,97N.A. PHARMACEUTICAL
INDUSTRY 20 APPENDIX 2:SEVERAL COMPARATIVE RATIOS OF PHARMACEUTICAL
COMPANIESRatiosDHGIMPDCLDMCVidiphaMekopharAverage Liquidity Current
ratio99,299,74,010,2(*)(*)53,3 Quick ratio62,060,92,25,6(*)(*)32,7
Capital structure Debt/Total asset ratio0,00,00,30,10,00,00,1 Debt/
Owners equity ratio0,00,00,70,10,00,00,1 Operating ratio
Receivables turnover6,76,53,36,54,99,45,6 Payables
turnover9,57,07,910,412,523,39,4 Inventories
turnover2,32,22,84,45,02,43,3 Profitability ratio Profit after tax/
Net sales9%11%11%7%14%10%10% Profit after tax/ Onwers
equity18%12%18%14%17%18%16% Profit after tax/Total
asset12%10%9%11%15%15%12% Operating profit/ Net
sales10%13%12%9%12%13%12% Share ratio
EPS6.8035.3425.2765.2964.6988.3855.967 Book
value37.72044.61628.71637.55128.29145.57137.078
P/E17,210,38,68,1(*)(*)11,1 P/B3,11,21,61,1(*)(*)1,8
Source:Financial reports of the companies PHARMACEUTICAL INDUSTRY
21APPENDIX 3: FINANCIAL REPORTS OF COMPANIES IN THE REPORT HAU
GIANG PHARMACEUTICAL JSC INCOME STATEMENT Indexes2006 A2007 A2008
A2009 E2010 F Net sales868,1921,269,2801,513,1721,600,0001,691,810
Cost of goods sold402,747627,628717,698758,881802,426 Gross profit
465,445641,652795,474841,119889,384 Gross profit
margin54%51%53%53%53% Interest payable10,70514,8395,2165,5155,832
Selling expense311,953442,839528,457558,780590,844 General
administration expense55,88160,319100,943106,735112,860 Net
operating profit 86,906123,656160,859170,089179,849 Income from
financial activities53,247(10,494) Other income1491902,655 Profit
before tax87,060127,093153,019170,089179,849
Tax17,412016,01817,00917,985 Net
profit69,648127,093137,001153,080161,864 Net profit
margin8%10%9%10%10% BALANCE SHEET Index2006 A2007 A2008 A2009 E2010
F Cash35.002129.951211.742188.979185.345 Short-term
investment-51.9552.3372.3372.337 Commercial
receivables154.257235.439225.957238.923252.632
Inventories121.353230.279308.202325.887344.587 Other current
assets18.93726.16390.40290.40290.402 Total current assets
329.550673.787838.640846.527875.303 Net fixed
assets143.167216.567224.355315.519403.284 Construction in progress
4.97512.2142.0032.0032.003 Long-term
investment1.60938.22566.69766.69766.697 Other long-term investment
3.5461.4151.7841.7841.784 Total
asset482.847942.2091.133.4781.232.5291.349.070 Short-term
borrowings 167.87043.4308.4558.4558.455 Trade
creditors18.47855.64275.87080.22484.827 Other short-term
borrowings104.780190.746277.108277.108277.108 Total short-term
borrowings291.128289.818361.434365.788370.391 Long-term debts and
loans260767-- Other21.0184715.16515.16515.165 Total non-current
liabilities312.406290.631376.599380.953385.556 Chartered
capital80.000200.000200.000200.000200.000 Issuing
surplus-378.761378.761378.761378.761 Treasury
shares--(293)(293)(293) Retained
earnings16.9131.219137.088198.300264.782 Funds
73.52871.59737.73878.545122.867 Total owners
equity170.441651.577753.295855.314966.117 Minority shareholders
interest--3.5844.7185.852 Total Liabilities and Owners Equity
482.847942.2091.133.4781.240.9851.357.525 PHARMACEUTICAL INDUSTRY
22IMEXPHARM INCOME STATEMENT Index2006 A2007 A2008 A2009 E2010 F
Net sales525.406451.602561.844629.266904.777 Cost of goods
sold367.260258.572319.809358.186515.011 Gross profit
158.146193.030242.036271.080389.767 Gross profit
margin30%43%43%43%43% Interest payable2.3837505337.3507.563 Selling
expense98.699113.380145.012162.414233.523 General administration
expense12.81321.93025.32530.55743.936 Net operating profit
44.25156.97071.16570.759104.744 Income from financial
activities555.3763.608 Other income2.808884(4.355) Profit before
tax47.11463.23170.41770.759104.744 Tax4.8388.7128.1837.07620.949
Net profit42.27654.51862.23563.68383.795 Net profit
margin8%12%11%10%9% BALANCE SHEET Index2006 A2007 A2008 A2009 E2010
F Cash65.60749.24439.41832.57518.866 Short-term
investment-155.29597.16997.16997.169 Commercial
receivables49.83350.05785.83096.130138.218
Inventories129.765137.818148.255166.045238.745 Other current
assets15.21577.49628.01228.01228.012 Total current assets
260.420469.910398.684419.931521.010 Net fixed
assets31.06941.201117.357207.988188.619 Construction in progress
3.9993.16114.62014.62014.620 Long-term
investment1.57523.06939.17639.17639.176 Other long-term investment
7.60831.08527.24527.24527.245 Total
asset304.671568.426597.082708.960790.670 Short-term borrowings
4.0524.0004.00020.00028.757 Trade
creditors30.92038.21945.80051.29673.755 Other short-term
borrowings35.03727.95325.19525.19525.195 Total short-term
borrowings70.00970.17274.99596.491127.707 Long-term debts and
loans---50.00040.000 Other4867012.2882.2882.288 Total non-current
liabilities4867012.288148.779169.995 Chartered
capital84.000116.598116.598116.598116.598 Issuing
surplus80.931278.108278.108278.108278.108 Treasury
shares--(94)(94)(94) Retained
earnings39.06550.37148.07561.20393.430 Funds
30.17952.47577.111104.365132.632 Total owners
equity234.176497.552519.799560.181620.675 Total Liabilities and
Owners Equity 304.671568.426597.082708.960790.670 PHARMACEUTICAL
INDUSTRY 23CUU LONG PHARMACEUTICAL INCOME STATEMENT Index2006 A2007
A2008 A2009 E2010 F Net sales346.497355.490474.667625.321706.463
Cost of goods sold294.127267.770350.154463.037527.542 Gross profit
52.37087.720124.514162.285178.922 Gross profit margin15%25%26%
Interest payable12.7159.09913.31125.43922.161 Selling
expense14.91319.19736.69254.40361.462 General administration
expense11.83713.61115.69918.82321.266 Net operating profit
12.90445.81258.81263.62074.033 Income from financial
activities(690)808(2.097) Other income(1.745)(690)120 Profit before
tax10.47045.93056.83563.62074.033 Tax04.5935.6836.3627.403 Net
profit10.47041.33751.15157.25866.629 Net profit margin3%12%11%9%9%
BALANCE SHEET Index2006 A2007 A2008 A2009 E2010 F
Cash9.5646.30813.3468.0927.891 Short-term investment--- Commercial
receivables45.314133.214142.353187.534211.869
Inventories59.84891.327123.727163.614186.407 Other current
assets12.92627.05835.38335.38335.383 Total current assets
127.651257.908314.809394.623441.549 Net fixed
assets136.825135.758217.116229.118219.921 Construction in progress
5894.86811.1053.0003.000 Long-term
investment1.0081.0081.0081.0081.008 Other long-term investment
----- Total asset266.073399.541544.037627.749665.478 Short-term
borrowings 72.7984.33079.691135.000142.000 Trade
creditors70.13960.91844.11558.33666.463 Other short-term
borrowings34.65758.27133.78433.78433.784 Total short-term
borrowings177.593123.518157.590227.121242.247 Long-term debts and
loans19.22235.836107.74284.05660.837 Other88182304304304 Total
non-current liabilities19.31136.017108.046311.481303.388 Chartered
capital56.00081.00097.19397.19397.193 Issuing
surplus415110.557110.557110.557110.557 Treasury
shares--(242)(242)(242) Retained
earnings1.15636.43545.86372.370104.445 Funds
11.59812.01325.03036.39150.137 Total owners
equity69.169240.005278.401316.268362.090 Total Liabilities and
Owners Equity 266.073399.541544.037627.749665.478 PHARMACEUTICAL
INDUSTRY 24VIDIPHA INCOME STATEMENT Index2006 A2007 A2008 A Net
sales170.458191.443 206.953 Cost of goods sold135.572148.668
163.049 Gross profit 34.88642.775 43.904 Gross profit
margin20%22%21% Interest payable1.584 -- Selling expense3.8436.501
7.060 General administration expense8.68210.662 11.328 Net
operating profit 20.77725.612 25.516 Income from financial
activities 3893.227 5.419 Other income 433 (227) 218 Profit before
tax21.59928.612 31.153 Tax2.1603.083 2.965 Net profit 19.43925.529
28.188 Net profit margin11%13%14% BALANCE SHEET Index2006 A2007
A2008 A Cash47.41559.20873.119 Short-term investment000 Commercial
receivables41.69449.58444.019 Inventories32.55033.24232.727 Other
current assets4.3938142.055 Total current assets
126.051142.847151.920 Net fixed assets34.40529.44235.040
Construction in progress 00240 Long-term investment2.2924.3253.709
Other long-term investment 000 Total asset162.748176.614190.909
Short-term borrowings 000 Trade creditors8.5688.88413.056 Other
short-term borrowings13.2746.0637.814 Total short-term
borrowings21.84114.94720.869 Long-term debts and loans157236292
Other000 Total non-current liabilities157236292 Chartered
capital50.00060.00060.000 Issuing surplus61.80361.80352.464
Treasury shares000 Retained earnings28.94737.97656.966 Funds
01.652317 Total owners equity140.750161.431169.747 Total
Liabilities and Owners Equity 162.748176.614190.909 PHARMACEUTICAL
INDUSTRY 25MEKOPHAR INCOME STATEMENT Index2006 A2007 A2008 A Net
sales467.179545.487596.028 Cost of goods sold348.306376.687437.185
Gross profit 118.873168.800158.843 Gross profit margin25%31%27%
Interest payable3.04190276 Selling expense21.06933.52438.711
General administration expense34.06552.83641.425 Net operating
profit 60.69782.35078.431 Income from financial
activities(858)1.057(203) Other income3.4251.9321.956 Profit before
tax63.26485.33980.183 Tax6.97122.55518.520 Net
profit56.29362.78461.663 Net profit margin12%12%10% BALANCE SHEET
Index2006 A2007 A2008 A Cash40.93145.20013.609 Short-term
investment3.8008.6469.156 Commercial receivables75.26796.71780.330
Inventories151.695161.737182.544 Other current
assets9.1706.25011.573 Total current assets 280.863318.551297.212
Net fixed assets33.65648.61289.175 Construction in progress 000
Long-term investment8.49018.59015.090 Other long-term investment
000 Total asset323.009385.753401.476 Short-term borrowings 000
Trade creditors7.4269.78618.735 Other short-term
borrowings45.48740.41034.099 Total short-term
borrowings52.91350.19652.835 Long-term debts and loans0
00Other5.25720.42713.495 Total non-current
liabilities5.25720.42713.495 Chartered capital84.00084.00092.100
Issuing surplus106.639107.702107.702 Treasury
shares-20.945-13.500-18.556 Retained earnings79.375112.328126.351
Funds 15.76924.60027.549 Total owners equity264.839315.130335.147
Total Liabilities and Owners Equity 323.009385.753401.476
PHARMACEUTICAL INDUSTRY 26DISCLAIMER All information in this report
has been verified carefully; however Bao Viet Securities
Joint-stock Company (BVSC) will
takenoresponsibilitieswithregardtotheaccuracyoftheinformation.Viewpoints,commentsandjudgmentsinthis
report are of personal stance of analysts and do not represent the
stance of BVSC.This report is for the purpose of providing
information and does not intend to advise the readers to buy,sell
or hold any securities. Readers should only use this analysis
report as a source of reference.BVSC can have business cooperation
activities with the subjects mentioned in this report. Readers
should be noticed that BVSC can have conflicts of interest with
investors when they implement this analysis report. CONTACT Bao
Viet Securities Joint-stock Company Head officeHo Chi Minh city
branchAddress:No. 8 - Le Thai To, Hoan Kiem, Ha NoiAddress:6 Le
Thanh Ton, Dist. I, HCM cityTel:(84) 4 3 928 808011 - Nguyen Cong
Tru, Dist. I, HCM city Fax:(84) 4 3 928 9899Tel:(84) 8 3 821 8564
Email:[email protected]:(84) 8 3 914 7477 SECTOR ANALYSIS
DIVISION DEPUTY OF THE DIVISION Nguyn Lng [email protected]
Th Thanh [email protected] CHUYN VIN PHN TCH Lu Vn
[email protected] Ch [email protected] Phng
[email protected] H [email protected] Th
[email protected] Tun [email protected] Thng
[email protected] Quang [email protected] Phng
[email protected] Minh [email protected] Hi
[email protected] Nguyn Phi Hng [email protected]
