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DHG Pharmaceutical (DHG VN) – FY 2025 – Profit Up 15.2% on Strong Pharmacy Growth
Summary of FY 2025 results and outlook of DHG Pharmaceutical JSC (DHG VN)
- Effective execution amid structural changes in the pharmacy channel. The segment underwent a period of notable transition in 2025, driven by new tax and e-invoicing requirements, alongside stricter enforcement against counterfeit drugs. These changes disrupted operations at traditional pharmacies—DHG’s core customer base. Leveraging its resources and extensive nationwide sales network, DHG has implemented several targeted support measures, which swiftly helped stabilize distribution conditions, strengthen retailer relationships, and support market share gains. Throughout the year, DHG continued to focus on strengthening its positioning by stepping up branding activities aimed at enhancing end-consumer awareness through TV and digital advertising, alongside broader brand campaigns across its non-prescription product portfolio. The company also advanced its strategic partnership with Taisho through the launch of Biofermin, a Japan’s leading probiotic brand by market share, reflecting DHG’s ongoing strategy of leveraging Taisho’s positioning in consumer healthcare and its R&D capabilities.
- Net revenue grew 7.8% to VND5,267bn, driven by a solid 10.4% y/y increase in self-produced products, lifting their contribution to 90.4% of total sales. By channel, growth was led by pharmacy sales, rising 12.0% y/y, with traditional pharmacies up 11.0% y/y, while modern pharmacy chains recorded a 29.0% y/y surge. Meanwhile, the hospital channel sales grew at a more moderate pace of 2.3% y/y.
- Net profit rose 15.2% y/y to VND 898bn, driven by improved operational efficiency and a more favorable product mix. Gross margin expanded to 47.7% (+3.9 ppt y/y), supported by higher profit margins from self-produced products as the contribution of higher-value EU-GMP drugs continued to increase. Meanwhile, SG&A expenses rose 25.3% y/y, mainly due to a 2.7x y/y jumped in advertising cost, partly reflecting a low base in 2024, as the company actively stepped-up investment in product branding to reinforce its market position and support medium-term growth.
- For 2026, following the transitional period of regulatory tightening aimed at enhancing transparency and product quality, the pharmacy channel is expected to stabilize, while also creating a more favorable competitive landscape for established pharmaceutical brands. Over the longer term, pharmaceutical demand is expected to be underpinned by rapid urbanization and industrialization, an ageing population, and the rising prevalence of lifestyle-related diseases, alongside government initiatives promoting local drug production and improved patient access to healthcare. Against this favorable industry backdrop, we project DHG’s 2026F net revenue to rise. Backed by a high proportion manufacturing facilities being EU-/Japan-GMP-certified, DHG is well positioned to further upgrade its product portfolio, enabling the company to better capture growing demand and underpin a sustainable growth trajectory.
Interested in DHG? Click here to read more of our previous analysis on DHG’s quarterly earnings.
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