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Company Quarterly Earnings Update – DHG VN – Q1 2025
Summary of Q1/2025 results and outlook of Hau Giang Pharmaceutical JSC (DHG VN)
- Net revenue from self-produced products grew 8.8% y/y to VND1,090bn, accounting for 90.7% of total sales though total sales fell 5.1% y/y due to a change in accounting for promotional products now recorded as direct discounts rather than bundled sales. By channels, pharmacy sales, making 84.9% of the total, rose 8.6% y/y thanks to its rising presence in modern chains (e.g., Trung Son, Long Chau, An Khang). Sales in the hospital channel, which made up 15.1% of the total, increased by 10.0%. Both channels benefit from the company’s upgraded production standard: by now approximately 70.0% of its products are produced with either EU- or Japan- GMP standards.
- Net profit rose 19.8% y/y to VND266bn. Gross profit increased by 10.7%, slightly higher than the growth rate of self-produced product sale thanks to the slightly improved gross margin. With flat SG&A costs, operating profit rose 22.9%, helping offset lower net financial income from declining deposit rates.
- AGM updates: The AGM approved 2024 and 2025’s cash dividend of VND10,000/share, translating to a dividend payout ratio of 173.0% in 2024 and 147.2% in 2025F. With no major capital expenditure planned, and a high cash position, AGM decides to return part of its retained earnings to shareholders.
- Net profit for the remaining 9 months is forecast to increase. In pharmacy channel, we expect sales to be driven by DHG’s boost sale in modern pharmacy chains in Ho Chi Minh City and Ha Noi. Additionally, some of the individual pharmacies, which were faced with suspension because of no reporting or tax code issues, are returning. In hospital channel, we expect net sales to be supported by DHG’s enhanced competitiveness on upgraded product standards. The U.S.–China tariffs may lower API costs as Chinese suppliers (~70% of global APIs) will redirect exports to other alternative markets. It is expected to offset higher operating costs from the new betalactam factory, lifting 2025’s gross margin.
- For 2026-2029, the upcoming EU-GMP certification for the betalactam plant will bring about 85.0% of DHG’s portfolio to Japan-GMP and EU-GMP standards. It positions DHG to greater access to higher-tier hospital tenders, better pricing in pharmacy channel while remaining competitive against local and imported drugs and expanded export potential.
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Featured image credit: Hau Giang Pharma
