Company Quarterly Earnings Update – IMP VN – 2020 Q1

Summary of the 2020 Q1 results of Imexpharm Pharma. JSC (IMP VN) 

Q1/2020 results: highlights
  • Revenue was up 11.2% y/y. Sales in pharmacies was supported by people stocking up medicines during COVID-19 period. Sales in hospitals, excluding a one-off in Q1/2019, increased strongly by 83.4% y/y thanks to sales from new GMP-EU factories. Profitability was similar as in Q1/2019: Net profit (VND41bn, +13.2% y/y) grew at a similar pace as revenue.
  • The financial position remained solid with only a modest leverage (D/E of 0.04x).
Highlight of 2020 AGM (expected date: 30 May 2020) agenda. We recommend to VOTE FOR
  • 2019 dividend of VND1,000/share, payable after the AGM
  • Bonus shares of 30%, after the AGM
  • ESOP: with a dilution factor of 3.6% and a 3-year vetting period. The last ESOP was in 2017.
Outlook
  • COVID-19 impacts: raw material disruption was eased as China production normalized. GMP-EU certification for IMP4 factory will be delayed as specialists from Portugal can’t come to Vietnam for the assessment due to the travel bans.
  • Long-term industry trends remain: sales in hospitals will be driven by an increase in national health insurance coverage and a shift of usage from imported drugs to high-production quality domestic drugs.
  • We retain our last forecasts: in 2020 revenue +25.4% and net profit +22.9%; in 2021 revenue +22.5% and net profit +17.2%.
Recommendation

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