Drug stocks set for robust growth on rising healthcare demand
Most drug makers listed on the Ho Chi Minh Stock Exchange have posted gains in the first half of the year.
The Cuu Long Pharmaceutical Joint Stock Corp. (DCL) announced first-half profits of VND28.2 billion for a year-on-year increase of 12.4 percent.
The Mekong Delta based pharmaceutical firm has obtained earnings-per-share (EPS) of VND2,909.
First-half profits for OPC Pharmaceutical Joint Stock Co. (OPC) rose 100 percent year-on-year to VND21.7 billion, for an EPS of VND2,659.
The Traphaco Pharmaceutical Joint Stock Co. (TRA) said in its first-half earnings report that net profits rose 16 percent to VND25.7 billion.
Its second-quarter profit of VND13.9 billion was up 19 percent from the previous quarter, since the costs dropped during the April quarter by more than 10 percent.
Drug stocks with large capitalization like Hau Giang Pharmaceutical Joint Stock Co. (DHG), Imexpharm (IMP) and Domesco (DMC) have also enjoyed healthy earnings.
Drug makers listed on the Hanoi Stock Exchange have also done well, with Hai Agrochem Joint Stock Co. (HAI) and Ha Tay Pharmaceutical Joint Stock Co. (DHT) posting higher first-half profits.
“Domestic drug makers retain a dominant position in the market thanks to their large distribution network,” analysts from the stock newswire Vietstock.com said in a report. “Additionally, investors usually expect drug stocks to maintain steady earnings even during challenging times as healthcare is an essential sector.”
Rising living standards over the past few years have manifested in growing demand for better healthcare.
In 2001, annual per capita healthcare expenditure was US$6, which increased to $16.45 last year. It is forecast to reach $25 by 2015.
Demand for medicines last year reached $1,426, a year-on-year rise of 25.4 percent. Figures from the Ministry of Health show Vietnam’s medicine market has been growing annually by 20-29 percent for the last several years.
The total value of medicines manufactured by domestic enterprises in 2008 rose 19.1 percent year-on-year to $715 million, meeting 50.2 percent of the market demand.
The health ministry has stipulated that all drug manufacturing plants have to adhere to the GMP (Good Manufacturing Practice) standard by 2010.
