Pharmaceutical giants 'clear warehouses', thinking long term

180% dividend

Ha Tay Pharmaceutical Joint Stock Company - Hataphar (DHT) closed the trading day without the right to pay stock dividends at a rate of 180% (every 100 shares will receive an additional 180 issued shares) on June 23.

The capital source to pay the above dividends comes from share premium, other capital of owners and undistributed profit after tax according to the data on the parent company's financial report in 2022.

Ha Tay Pharmaceutical issues a "huge" bonus share in the context of very positive business results in 2022 with net revenue reaching nearly 1,840 billion VND, an increase of more than 14% over the same period last year. Net profit is nearly 99 billion VND, an increase of 38.5%. This is also the largest profit of DHT, since the enterprise was listed on the stock market in 2008.

Ha Tay Pharmaceutical sets a revenue target of VND1,600 billion and pre-tax profit of VND80 billion in 2023, down from 2022.

In 2019, Ha Tay Pharmaceutical had a revenue of more than 2,000 billion VND. This is also the second largest listed pharmaceutical company in terms of revenue in Vietnam.

Compared to many businesses, DHT's dividend payment is not too high and is only paid in shares, not in cash up to 150-350% like Idico Petroleum Construction Investment (ICN), or Portserco Logistics JSC (PRC)... However, this is also the dream of shareholders of many businesses.

*The pharmaceutical industry attracts foreign investors. (Photo: TH)*

In fact, the dividends of pharmaceutical companies are often very high. At Central Pharmaceutical 3 - Foripharm (DP3), the 2022 cash dividend advance is 80%, equivalent to 8,000 VND per share. Vietmec Pharmaceutical (DVM) also calculates dividends and bonus shares up to 80% from retained earnings and share premium.

Attract foreign investors

Pharmaceutical stocks are considered a "safe haven" for investors because of their defensive nature and safety for long-term investment. This is also a group of businesses that strongly attracts foreign capital.

The attractiveness of the pharmaceutical industry has been clearly demonstrated over the years. Many large foreign corporations, from the US, Japan, Korea, etc., are willing to spend large sums of money to buy up, even spend a lot of money to take over entire businesses, dominating domestic pharmaceutical manufacturers.

Japan's ASKA Pharmaceutical Co., Ltd. spent hundreds of billions of VND and by the end of 2021 owned nearly 25% of Hataphar's capital.

Currently, most of Vietnam's leading pharmaceutical manufacturers have foreign strategic shareholders such as Hau Giang Pharmaceutical (DHG), Domesco (DMC), Traphaco (TRA), Imexpharm (IMP), Pymepharco (PME)... Some have moved to control over 51%, even taking over the whole thing.

At Domesco, the American giant Abbott holds nearly 51.7%. The State Capital Investment Corporation (SCIC) only holds more than 34.7%. Meanwhile, Taisho Pharmaceutical (Japan) holds 51% of shares at Hau Giang Pharmaceutical.

In 2020, when the Covid pandemic broke out, foreign giant Stada Arzneimittel AG (Germany) took over, bought all shares of Pymepharco and then delisted PME shares in 2021.

PME is the predecessor of Phu Yen Pharmaceutical and Medical Supplies Company, established more than 30 years ago. This is also one of the leading pharmaceutical manufacturers in Vietnam and the region with a system of pharmaceutical factories meeting EU-GMP standards. This pharmaceutical company has the second largest capitalization scale on the stock exchange after Hau Giang Pharmaceutical (DHG).

At the end of 2017, when PME went public, German pharmaceutical company Stada owned 49% of the shares, Mr. Truong Viet Vu owned 13.2%, with nearly 700 billion VND (nearly 30 million USD). He is one of the super-rich people in Vietnam.

At Imexpharm, investor SK Group (Korea) is holding approximately 48% of shares. Including related companies, the ownership ratio of this group of shareholders is up to over 55%. Meanwhile, foreign investors hold more than 40% of shares at Traphaco.

Foreign investors spend hundreds, even thousands of billions of dong to acquire Vietnamese pharmaceutical companies. In the case of Hau Giang Pharmaceutical, Taisho is estimated to have spent about 7,000 billion dong.

In the case of Ha Tay Pharmaceutical, Japanese investors have only invested a few hundred billion VND and are planning to promote this enterprise. Paying dividends in shares at a rate of 180% will help this enterprise expand its capital scale.

DHT is investing in the Hataphar high-tech pharmaceutical factory in Hoa Lac High-Tech Park ( Hanoi ) with an area of 4.5 hectares. DHT forecasts that the new factory's revenue may arise from 2024 after phase 1 is completed.

Vietnam’s pharmaceutical industry has recently developed strongly and has high growth potential in the medium and long term. Many reports from securities companies show that the potential of this industry is quite bright thanks to the large size of Vietnam’s population and the rapid aging process.

Meanwhile, per capita income is increasing rapidly, the demand for medical and health care products is increasing. The size of this market could more than double to 16 billion USD in the next 3 years.

Pharmaceutical tycoon mother and son sell everything to collect money, mysterious big boss appears

Many industries, including pharmaceuticals, have attracted the attention of domestic and foreign giants. The Covid-19 pandemic has made pharmaceutical stocks more attractive than ever and is attracting strong cash flows.

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