Company Quarterly Earnings Update – IMP VN – 2021 Q1

Summary of the 2021 Q1 results of Imexpharm Pharma. JSC (IMP VN) 

Q1/2021 earnings highlights:

  • Net revenue recorded VND296bn, -2.4% y/y. IMP’s own products made up 97.6% of total sales, growing by 6.1% y/y while outsourced revenue significantly dropped. The own product group growth rate was not that moderate as it looked like. For the OTC group, Q1/2020 was a rather high base as sales via pharmacies surged because people hoarded some general medicines when the pandemic just started with a lot of uncertainties. For the ETC group, the third Covid19 wave in Vietnam was during Feb 2021, leading to lower sales in hospitals as more patients delayed their visits to hospitals to avoid infection whereas in 2020 the first and second wave was in Q2 and Q3.
  • Net profit was VND42bn, +1.8% y/y.
  • The financial position remained solid, although leverage increased moderately (D/E of 0.14x) as IMP got a 2-year USD8mn loan at low rate (~3%) from ADB during Q1.

Outlook

  • The fourth wave of Covid19 started in Vietnam since late April. The government has swiftly reacted and most of the new cases in the recent days are those already quarantined because of their having contacts with previous cases, before tested positive. The IQVIA estimates Vietnam’s pharmaceutical spending to increase by 8.0% in 2021 after a 3.8% growth in 2020.
  • For IMP, our estimates for 2021 and 2022 don’t change much from our previous report. The company’s growth driver continues to be its EU-GMP factories, products of which will sell well in the ETC channel, competing directly with international renowned brands thanks to its lower prices and similar production standards. Our expected revenue growth rates for 2021 and 2022 are 18.5% and 16.5% respectively. Gross margin is expected to stay similar as in 2020. And net profit is forecasted to grow by 12.8% and 20.0% respectively in 2021 and 2022.

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