Company Quarterly Earnings Update – DHG VN – 2021 9M

Summary of the 2021 9M results of Hau Giang Pharmaceutical JSC (DHG VN)

9M/2021 results highlights:

  • Revenue increased by 14.4% y/y to reach VND2,909bn. The company’s own products accounted for 86% of the total, an increase of 10.0% y/y. DHG sells 85% of its own products via pharmacies and the remaining 15% is distributed via hospitals/ clinics. Strict social distancing measures were implemented in Q3 due to the 4th wave of COVID-19. Lockdown measures in Ho Chi Minh City and neighboring provinces were only lifted from the 1st of October 2021. Pharmacies have been allowed to open throughout lockdown. Overall, they have experienced a notable increase in the consumption and stockpiling of general immune system boosting supplements and basic fever/pain relief medications.
  • Net profit was VND605bn, up 11.5% y/y, growing at the same pace with their own product revenue, thanks to stable profitability.
  • DHG’s financial position remains solid with low leverage (D/E of 0.10x) and high cash and deposits levels (51.0% of total assets).


  • For 2021, we retain our previous estimates for both revenue (VND3,990bn, +6.3% y/y) and net profit (VND784bn, +6.2% y/y). DHG’s 9M/2021 result slightly exceeded our estimate thanks to a stronger sales growth and lower operating costs. Nevertheless, we believe Q4 results will be soften due to 1) consumer stockpiling will likely recede as social distancing measures are eased; and 2) higher operating costs when certain sales and marketing activities resume.
  • In 2022, we assume the immediate impact of COVID-19 will have run its course as Vietnam can almost fully reopen when vaccination rates reach 70%. Revenue growth for DHG will be driven by a greater variety of supplements produced at Japan-GMP standards. Our estimated revenue and profit growths stand at 8.8% and 8.4% respectively.

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