Company Quarterly Earnings Update – IMP VN – 2019 Q1

Summary of the Q1/2019 results of Imexpharm Pharma. JSC (IMP VN) 

Q1/2019 results: highlights
  • Revenue was VND 273 bn, +7.9% yoy. Revenue from own products, and outsourced products accounted for 91.0% and for 8.5% of that amount, respectively. Within the own product segment, sales through hospitals registered  strong growth of 18.2%, while sales  through pharmacies were up by 8.2%.
  • The company’s gross margin rose However, IMP was affected  by  higher operating expenses, mostly for marketing activities, partly offsetting the improved gross margin. The bottom line recorded VND 36 bn, +10.5% yoy.
  • IMP’s financial position remained solid with negligible borrowing.
  • The AGM approved a dividend of VND2,000/share for the 2018FY.
Outlook
  • FitchSolutions (previously BMI) forecasts an 11.0% CAGR from now till 2027 for pharmaceutical sales in local currency. The segment of prescribed medicine is estimated to grow faster and to contribute 77% of the whole market by 2027, up from 75% in 2018, mainly thanks to  increased insurance coverage. It seems that the market currently prefers  imported medicine (56% of total medicine) for quality reason. However, new regulations are supporting domestic firms, which can produce high-quality drugs that are compliant with international
  • We estimate IMP to grow faster than the industry average, with a 17.4% CAGR for own product revenue till 2023, thanks to added capacity with GMP-EU standards. The extra capacity will allow IMP to sell more products to public hospitals. Please note that, in 2018, IMP accounted for only ~2% of all domestic producers’ revenue.
  • IMP’s bottom line is set to grow at a similar pace: 17.0% CAGR till 2023.

 

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