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Hau Giang Pharmaceutical (DHG VN) – Q2 2025 – Profit Soars 21% on High-Margin Sales
Summary of Q2 2025 results and outlook of Hau Giang Pharmaceutical JSC (DHG VN)
- Net revenue from self-produced products grew 8.9% y/y to VND2,186bn, accounting for 92.0% of total sales and offsetting declines in low margin distributed goods, leading to a slight 0.6% y/y rise in total sales. By channel, pharmacy channel sales (84.9% of total) rose 8.1% y/y, driven by rapid expansion in modern chains like Long Chau, An Khang (~7.0% of pharmacy sales). Traditional stores saw modest growth due to higher consumer trust in brands like DHG amid government anti-counterfeit efforts. Hospital channel sales rose 13.7% y/y from larger nationwide tenders and greater competitiveness of DHG’s EU-/Japan-GMP-certified products.
- Net profit rose 21.3% y/y to VND503bn led by mixed factors (1) gross margin rising to 48.5% (from 45.2%) thanks to higher mix of EU-GMP products, higher share of self-produced goods with stable production costs, (2) SG&A costs held at 25.8% of sales, with selling costs rising on pharmacy expansion offset by flat administration expenses; and (3) reduced net financial income from lower deposit rates.
- Policy Tailwinds & DHG’s product advantages: Prescription drugs make up est. 67.0% of total sales, with the rest from non-prescription & supplements. In pharmacy channel, anti-counterfeit efforts continue to favor DHG. It promotes synergies with parent firm Taisho Group—Japan’s leading non-prescription drug firm—whose long-trusted brands like the Pabron series (nasal congestion and fever relief, 90+ years) and RiUp (hair growth, 16+ years) hold top market share and ensures earning growth across generations. Leveraging Taisho’s global expertise, DHG is well-positioned to sustain growth through its widely used product portfolio. In the hospital channel, favorable policies for high-quality local drugs continue to drive demand. Key products like Hapacol (pain & fever relief), Klamentin (antibiotic), Glumeron (diabetes) are priced ~51.0% below imports—will support sales, with further growth from expected EU-GMP certification of its beta-lactam factory in 2025.
- For H2/2025: A better share of high-margin self-produced products and expected lower material costs like APIs from easing USD/VND further improves H2’s gross margin and lifts full-year margin. SG&A costs are predicted to rise from modern pharmacy expansion and year-end marketing. For 2026: net sales are projected to be led by the growth in pharmacy and in hospital.
Interested in DHG? Click here to read more of our previous analysis on DHG’s quarterly earnings.
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