Company Quarterly Earnings Update – DHG VN – 2021

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

2021 results highlights:

  • Revenue increased by 6.6% y/y to reach VND4,003bn, decelerating from a 9M growth of 14.4%. Q4 revenue declined by 9.8% y/y because of production disruption caused by lack of staff due to COVID. However, demand remained very strong as seen in the low level of finished-goods inventory at year’s end.
  • The gross profit margin remained somewhat unchanged at 48.0%. Nevertheless, selling expenses increased due to a rise in sales and a marketing campaign for many products that are produced with Japan-GMP standards such as for pain/fever relief Hapacol. All in all, net profit increased by 5.1% to VND776bn.
  • DHG’s financial position is solid with low leverage (D/E of 0.05x) and a high cash level (46.6% of total assets). DHG has plans to expand its Hau Giang factory with a capex of VND920 bn, disbursed from now until the end of 2024. With the current financial position, the company can finance this project with its retained earnings.


  • Thanks to Vietnam’s fast vaccination program (by now, close to 80% are fully vaccinated, and 40% have a booster), we estimate that all COVID-19 related impacts will subside from Q2/2022 onwards. IQVIA estimates Vietnam’s pharmaceutical spending will increase by 8.0% p.a., driven by supplements in pharmacy sales, and higher coverage of public insurance in hospital medicine spending.
  • We estimate DHG’s revenue will increase by 8.5% and 8.9% in 2022 and 2023 respectively. Its strength of having a wide network of pharmacies will be further boosted with quality products from the support of Taisho. While profitability is estimated to remain unchanged, financial income will be lower due to capex spending. Net profit is expected to increase by 10.6% and 4.8% in 2022 and 2023.

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