2012 03 Pharmajun09

PHARMA INDUSTRY REPORT
JUNE 2009
CONTENT
HIGHLIGHTS OF VIETNAM PHARMACEUTICAL INDUSTRY
Bao Viet Securities Company

8 L Thi T, Hon Kim, H Ni.
Page 2
The industry in the growth period
Page 2
Dependence on imported materials
Page 3
The majority of drugs are low-end products
Page 4
Typical distribution network
Page 5
Competition from foreign pharmaceutical corporations
Page 6
Undeveloped R&D in Vietnam
Page 7
Governmental policies
Page 8
Tel: (844) 3 928 8080.
THE TREND OF THE PHARMACEUTICAL INDUSTRY IN 2009
Page 9
Fax: (844) 3 928 9888.
HAU GIANG PHARMACEUTICAL JOINT-STOCK COMPANY
Page 11
IMEXPHARM PHARMACEUTICAL JSC
Page 13
CUU LONG PHARMACEUTICAL JOINT-STOCK COMPANY
Page 15
BVSC HCMC Branch
MEKOPHAR CHEMICAL PHARMACEUTICAL JSC
Page 17
11 Nguyn Cng Tr, Qun 1
VIDIPHAR CENTRAL PHARMACEUTICAL JSC
Page 18
Email: info@bvsc.com.vn.
Website: http://www.bvsc.com.vn.
6 L Thnh Tn, Qun 1

Tel: (848) 3 821 8564 - 3 914 1992.
Fax: (848) 3914 1991.
Email: info_hcm@bvsc.com.vn.
SOME JARGONS:
GMP: Good Manufacturing Practice.
GLP: Good Laboratory Practice.
GSP: Good Storage Practice.
GMP-WHO: GMP standard of WHO
BMI: Business Monitor International
OTC: Non-Prescription drugs
Generic drugs:A generic drug (generic drugs, short: generics) is a drug which is
produced and distributed without patent protection. The generic drug may still have
a patent on the formulation but not on the active ingredient. (source Wikipedia)
Patent drugs : a drug or remedy protected by a trademark, available without a

prescription (Medical Dictionary)
PHARMACEUTICAL INDUSTRY
HIGHLIGHTS OF VIETNAM PHARMACEUTICAL INDUSTRY
The industry in the growth period

Increasing consumption: From 2001 2008, consumption of pharmaceutical products of
Vietnam had an average growth rate of 19.9%/year. If the growth rate in 2002 was 15%
yoy only, that in 2008 was 25.5% yoy. The total revenue of the market in 2008 reached
1.4 billion USD, accounting for 1.6% of the GDP.
Domestic drug consumption from 2001 - 2008
1.600
1.400
1.200
1.000
800
600
400
200
Imported
Spending on drug per person (USD)
Domestic
18
16
14
12
10
8
6
4
2
0
2001 2002 2003 2004 2005 2006 2007 2008
1993
Source: Drug Administration of Vietnam
1996
1999
2002
2005
2008
In recent years, Vietnamese consumers are spending more money on medical services,
especially drugs. While spending on pharmaceuticals in 1998 was USD 5.5/person, that in
2008 was USD 16.45/person, a threefold increase compared to 1998. Based on the
additional income proportion only, it can be seen that people are spending more on drugs.
At present, for each additional dollar in income (about VND 17,000), Vietnamese people
set aside 1 cent (about 170 dongs) for drugs (or about 1% of the additional income
proportion).
Production growth: With increasing demand for pharmaceutical products, companies in
the industry are expanding their production (output of 2007 rose 26% compared to 2006).
Drug consumption and production growth
Total consumption
1.600.000
1.400.000
Domestic production
1.200.000
1.000.000
800.000
600.000
400.000
200.000
0
2001
2002
2003
2004
2005
2006
2007
2008
Source: Ministry of Health
Besides increase in production output, pharmaceutical manufacturing companies are also

diversifying their products. In the past 3 years, there have been about 2,000 types of
2
western drugs registered and licensed in the market each year while there were only about
700 types of drugs registered in 2003.
At present, there are about 171 pharmaceutical manufacturing companies, including 93
companies which manufacture western drugs and those which manufacture oriental drugs.
There are also 6 companies which manufacture vaccine and healthcare products. Recently,
most of pharmaceutical companies have accumulated relatively significant amount of
capital from the increase in consumption output and issues of shares. Thus, domestic
companies are able to continue to invest in production capacity enhancement.
Increase of standardized companies. At present, standards in the pharmaceutical sector in
Vietnam are categorized into GMP (Good Manufacturing Practice), GLP (Good Laboratory
Practice) and GSP (Good Storage Practice).
Under WTO commitments, by the end of 210, Vietnamese pharmaceutical companies are
subjected to meet WTO production standards (GMP-WHO standards). Otherwise, they will
be obliged to cease production. By 2008, 52% of pharmaceutical companies (including
those manufacturing new and oriental pharmaceuticals) met the standards of GMP-WHO;
in which 51% and 63% of companies met the GLP and GSP standards. In fact, Vietnamese
companies only started to pay attention to these standards in the past few years and are
making their best efforts to enhance their competitiveness to survive and develop.
Number of companies reaching GMP WHO standards
100
89
75
80
66
57
60
41
40
20
18
25
45
31
0
96 - '00
2001
2002
2003
2004
2005
2006
2007
2008
Dependence on imported materials

Due to weaknesses of chemical, 90% of the materials for production of western drugs are
imported. The main types of imported pharmaceutical materials are antibiotics and
vitamins, which account for more than 80% of the import value.
China and India are two biggest exporters of pharmaceutical materials into Vietnam,
accounting for 25% and 21% respectively in 2008. As Vietnamese companies at present are
mainly producing common drugs, they are using many types of cheap pharmaceutical
materials imported from the two countries.
Pharmaceutical materials exported to Vietnam
5%
5%
11%
China
India
Singapore
Holland
Spain
Others
Italy
Austria
25%
11%
21%
12%
Types of imported pharmaceutical materials
12%
5%
Antibiotics
5%
Vitamins
13%
Antipyretic, painrelief, antipasmodic

Anti-inflammatory drug
58%
24%
Others
Source: Trade Review magazine
With too much dependence on imported materials, the Vietnam pharmaceutical industry
incurs a lot of risks, particularly risks from exchange rate difference, price swings, material
quality and trading.
Risks from exchange rate difference. In 2008, most of pharmaceutical companies

incurred losses due to unexpected exchange rate difference. As far as we can see,
pharmaceutical companies at present have not got specific plans to prevent risks from
exchange rate differences in the future.
Risks from material price swings. In 2008, the prices of main imported
pharmaceutical materials increased, for example the price of antibiotics went up 2%
on average (particularly Cephalexin Bp had an increase up to 11.7% in imported
price), that of vitamins increased by 34% and that of materials for the production of
pain-relief and antipyretic drugs increased by 80%. Such increases were the reasons
for significant adjustments in drug prices in the market last year.
Price swings of materials in 2008 compared with 2007
Antipyretic,
pain-relief,
antipasmodic
Vitamins
Antibiotics
80%
34%
2%
Source : Trade Review Magazine
Risks from quality of pharmaceutical materials. Pharmaceutical materials imported

from China involve hidden risks in terms of quality. However, these risks can be
prevented if domestic companies follow closely quality control processes.
The majority of drugs are low-end products

According to international practices, there are two ways to categorize pharmaceutical
products:
On the basis of usage instructions, drugs are categorized into OTC drugs (without
dosage, mainly sold at retail drugstores) and prescription drugs (drugs with
prescription delivered into hospitals and medical centers). However in Vietnam, there
are little differences between OTC drugs and prescription drugs as prescription drugs
are being sold widely in the market. Thus, we temporarily divide drugs into two
categorizes: drugs distributed to hospitals and drugs distributed to the market. In 2008,
spending on drugs in hospitals was VND 12.322 billion (corresponding to USD 760
million), accounting for about 50% of the total value of drugs in the market.
On the basis of pharmaceutical compounding patents, pharmaceutical products are

divided into generic drugs (those whose patents are expired) and patent drugs (those
whose patents are in effect). At present, the domestic pharmaceutical industry is
producing generic drugs of low values, accounting for 69% of the total market share,
particularly antibiotics and generic drugs such as vitamins, pain-relief drugs and
antipyretic drugs.
Typical distribution network

The pharmaceutical industry gets access to consumers through treatment distribution
system and commercial distribution network.
Treatment distribution network. The treatment network includes hospitals and other
treatment units of different levels. The total number of medical examination and treatment
units in Vietnam in 2007 was 13,438. Almost all pharmaceutical companies wish to
promote this distribution channel because of its large consumption quantity.
Pharmaceutical companies get access to customers and expand their market shares by
measures such as giving commissions or discounts to doctors and pharmacists.
However, besides the advantages of high turnover that this distribution channel brings,
domestic pharmaceutical companies are also facing with difficulties that such distribution
channel entails.
Firstly, selling through hospitals occupies a high amount of working capital of

pharmaceutical companies because hospitals normally settle payment at the end of the
year.
Secondly, foreign pharmaceutical companies with financial advantages give a high

commission and discount to the treatment network, creating considerable competition
to domestic companies.
Drug distribution structure in hospitals in 2008
Quantity of units in the treatment network

2006
2007
Hospitals
903
956
80%
Local general practice surgeries
847
829
60%
Treatment and functional recovery hospitals
51
51
40%
Medical aid stations of communes, districts
10,672
10,851
20%
Medical aid stations of organs and companies
710
710
49
41
13,232
13,438
100%
Domestic Imported
Year
Other units
0%
Value
Quantity
Total
In fact, domestic drugs account for 61% of the selling quantity; however, it only takes 15%
of the consumption value in the treatment distribution network. It shows that the domestic
pharmaceutical structure mainly contains common goods with low value. As such, in order
to maintain the quantity proportion and heighten the value proportion of pharmaceuticals
sold through hospitals, Vietnamese pharmaceutical companies will have to make great
effort to compete with foreign companies.
Commercial distribution network. The commercial network includes branches, agents,
distributors and drugstores. At present, domestic pharmaceutical companies are trying their
best to promote the commercial distribution channel in order to reduce the dependence on
the treatment distribution network which is facing intense competition. This distribution
network mainly consists of domestic distributors meanwhile there are only three foreign
distributors in the market, including Zeullig Pharma, Diethelm and Megaproduct.
Distribution structure in the commercial network of 2008
Domestic
Commercial distribution network structure
Year
Imported
100%
Commercial companies
80%
2005
2006
2007
680
800
800
79
89
90
60%
Import export companies
40%
Production companies
174
178
180
20%
Foreign suppliers
270
320
370
29,541
39,319
39,016
0%
Value
Quantity
Retail units
With the commercial distribution channel, working capital is turned over faster thanks to
shorter debtor days. Besides, product brand name can be easily recognized particularly in
the context that domestic companies are mainly producing generic drugs.
However, pharmaceutical companies are also facing with challenges when they wish to
develop strongly this distribution channel.
To expand their branches, pharmaceutical companies have to build up warehouses

meeting GSP standards. This requires financial capacity of companies due to large
investment expense, about VND 5 billion/branch.
Vietnam at present has a small number of drugstores and agents reaching GPP
standards. From 2011 on, those which fail to meet the standards will not be permitted
to sell prescription drugs.
Competition from foreign pharmaceutical corporations

Vietnam pharmaceutical market with dense population and low domestic production
capacity is a very attractive market for foreign pharmaceutical companies.
Well-known pharmaceutical corporations such as Sanofi Aventis, GSK, Servier, Pfizer,
Novatis Group, etc have made their presence in Vietnam and completely captured the
domestic market of prescription drugs as well as expanded the market share of generic
drugs.
Most of foreign pharmaceutical corporations operate in Vietnam in the form of
representative offices and authorized representatives being domestic pharmaceutical
companies. These units will on behalf of these corporations import drugs and have foreign
distributors distribute to retail drugstores.
10 biggest drug exporters to VN
Australia
23
United Kingdom
25
Hongkong
27
Thailand
Singapore
Germany
Switzerland
Revenue of several pharmaceutical companies in VN
Domesco
9.302
16.243
DHG Pharma
34
Novartis Group
37
17.214
Pfizer Group
41
18.930
Servier Group
50
82
South Korea
21.176
GSK Group
35.333
105
India
143
France
40.384
Sanor-Aventiscor
Foreign pharmaceutical corporations acquire the market shares in Vietnam thanks to

advantages of financial capabilities and products.
Strong financial resources enable these corporations to make high commissions to

hospitals and distributors as well as to sponsor medical and pharmaceutical schools and
scientific conferences.
Foreign imported products are high in value and various in categories, ranging from
common drugs to specialty drugs, meanwhile domestic drugs are mainly common.
Kinds of imported drugs
18%
Antibiotics
Nutritional transform
38%
Cadiovascular
10%
5%
11
%
9%
8%
Antipyretic, pain-relief, antipasmodic

Disgestive
Metic - analetic
Others
Undeveloped R&D in Vietnam

Pharmaceutical chemistry industry has been underinvested: Pharmaceutical chemistry
technologies in Vietnam are comparatively outdated. The Government of Vietnam has
drawn out plans to develop the pharmaceutical chemistry industry in order to meet 40% of
the demand of antibiotics substance for domestic production in 2015. However, according
to our research, several projects on pharmaceutical material manufacture (Celphalosphorin)

of the Ministry of Industry have come to a standstill due to ineffective operations.
Besides such issues as technologies, the pharmaceutical chemistry industry is also facing a
number of difficulties.
Financial issues. Production cost of a new active element is rather high, about more
than 100 billion dongs. Meanwhile, the budget of the State and other companies for
research is rather limited.
Legal issues. At present, the legal framework for research and experiments of drugs on
human beings in Vietnam is incomplete, causing entanglements to the experimental
operations.
Thus, we think that the above target set by the Government is unlikely to be achieved
according to the projected schedule.
Development of new products of domestic pharmaceutical companies is R&C only
At present, Vietnam pharmaceutical industry is at level 2.5 out of the total 5 levels of
technological advance. At this stage, almost all of drugs produced are generic types (those
whose technological patents have expired). In this context, we temporarily call the research
and production of new drug products of Vietnam R&C (research and copy).
Statistics on expenses of a number of leading companies below have reflected the fact that
there are lots of limits in R&D activities of the pharmaceutical industry.
Company
DHG
IMP
DCL
% research expense/revenue
1%
5%
2%
Number of research staff
33
25
25
Source: Pharmaceutical companies
Governmental policies
Price control: Drugs are a sensitive type of goods with remarkable impacts on the society.
Thus, they are put in the list of goods under price control by the Government of Vietnam.
According to regulations of the Drug Administration of Vietnam, companies are subjected
to register the selling prices of drugs at the Drug Administration on the basis of their annual
production costs. If there are strong price swings of input materials, drug manufacturing
companies are entitled to apply to the local healthcare department for adjustments of the
prices. However, foreign imported drugs are not regulated by this price control policy.
In 2008, with strong price volatility of pharmaceutical materials, some domestic companies
were forced to increase the prices of drugs above the registered figures. In many cases,
functional authorities have made slow responses to market developments and partly
affected the operating results in 2008 of domestic pharmaceutical companies.
Policies on pharmaceutical industry development. The Government has issued the
scheme Developing the pharmaceutical industry and building the model of drug supply
network of Vietnam in the period of 2007 2015 and vision to 2020 in order to enhance
the capacity of the domestic pharmaceutical industry. However, the content of the project
mainly focuses on the targets and tasks but has not brought about specific support policies
for pharmaceutical companies. Thus, in the near future, in our opinion, it will be difficult
for pharmaceutical companies to have breakthroughs especially in researching
pharmaceutical materials and developing new products.
The trend of the pharmaceutical industry in 2009

Minimum growth of the pharmaceutical industry as of 9.6% this year
We forecast that the minimum growth rate of the pharmaceutical industry in 2009 is 9.6%
on the basis of below assumptions:
Vietnamese population is 87.9 million in 2009 (IMF)
The proportion of additional expenditure on medical services per added income is

still maintained at 1.6% as in 2008.
Targets
2004
2005
2006
2007
2008
2009E
GDP/head according to PPP (USD)
1,949
2,140
2,357
2,589
2,774
2,858
10%
10%
10%
7%
3%
9.9
11.2
13.4
16.5
17.8
15%
14%
19%
23%
8%
820
948
1,147
1,428
1,565
16.2%
15.6%
21.0%
24.5%
9.6%
Growth rate
Spending on drugs/person (USD)
8.6
Growth rate
Total spending on drugs (tr USD)
705
Growth rate
Source: IMF, Ministry of Health, BVSC
The project to expand and build new plants

Almost all big pharmaceutical companies have developed plans to expand their production
in 2009 and 2010 such as Hau Giang Pharmaceutical, Imexpharm, Cuu Long
Pharmaceuticals and Vidiphar. With new plants, the pharmaceutical industry can maintain
the above growth rates in coming years.
Company
Investment capital (billion

dongs)
Progress
Expected time of
completion
Hau Giang
Pharmaceutical
252
Applying to the Ministry of Health for

approval of design scheme
QII/2011
Imexpharm
110
Construction of parapets finished
QIV/2009
Cuu Long
Pharmaceutical
150
Machineries installed, test-run in June
July 2009
Vidiphar
120
Plants are under construction
End of 2010
Pharmaceutical production and trading companies are active in broadening

commercial distribution network.
In order to achieve the revenue growth targets as well as actively seek and expand the
market shares, many pharmaceutical companies have put forward plans to expand their
distribution networks, upgrade distribution agents which reach GPP standards or construct
large warehouses which reach GSP standards. This will facilitate the distribution of
common drugs such as pain-relief, antipyretic and functional food to customers.
Company
Investment capital for a branch/warehouse (billion dongs)
Current number of branches
Hau Giang Pharmaceutical
50 (branch)
25
Cuu Long Pharmaceutical
50 (branch)
15
62 (3 new warehouses)
10 billion (upgrading Can Tho and Cuu Long 1 branches)
Domesco
IMP
HAU GIANG PHARMACEUTICAL JOINT-STOCK COMPANY

10
SHARE INFORMATION
Highlights.
Ticker:
DHG
Trading bourse:
HOSE
52-week low:
94.5
52-week high:
155.0
Capitalization value (VND

billion):
Wide distribution network. Compared to other companies in the same

industry, the distribution network of DHG is among the strongest ones.
Number of branches/
drugstores of the company
Number of
distributing agents
Representative
office
DHG
22
20
IMP
DMC
75
2,319.19
Number of outstanding
shares:
19,993,070
10-day average trading

volume:
27,050
Dividend payout ratio:
25%
OWNERSHIP INFORMATION
State-owned
44.28%
Foreign owned
43.60%
Other
12.12%
PRICE PERFORMANCE
DHG
150
Source: DHG, IMP, DMC
At present, in order to enhance operating efficiency of the branches, the Company

has shifted from the pattern of branches to the pattern of subsidiary companies to
enable them to implement the contracts signed with drugstores and to strengthen
market access operations at the same time.
Large and modern production scale. At present, DHG is still leading in terms
of production scale in the pharmaceutical industry.
150
140
140
130
130
120
120
110
110
100
100
150000
150000
100000
100000
50000
50000
(VND billion)
DHG
IMP
DMC
MKP
DCL
2008 production
revenue
1.431
534
481
500
242
Source: Companies
A S O
N D
2009
Sales policies. DHG is the manufacturer with high sales commissions/discount

ratios for agents and treatment network (selling expense/net revenue ratio
often stands at about 35%). Thanks to this policy, DHG can maintain its large
market share and achieve a high growth rate in the recent period.
A M J
Performance in 2008.
In 2008, in the context of market fluctuations, DHG changed its product

structure in order to cut down on the groups of products with low revenue and
gross profit margin. Although the output in 2008 fell by 12%, thanks to such
changes, revenue in 2008 still reached a growth rate of 19% and gross profit
still reached a growth rate as of 53% compared to 51% in 2007.
2009 prospect.
It is expected that revenue in 2009 would be about 1600 billion dongs and
profit before tax margin proportion would be 10%.
In 2009, DHG is projected to launch from 30 to 40 new products, including 8

products being functional food. The others will be antibiotics, pain-relief and
antipyretic drugs with more advanced characteristics than the present products
of DHG.
The plant in Tra Noc will be completed at the end of 2010 and can be brought
into operation in 2011 with a capacity of 3 billion tablets/year. The total
expected investment expense is about 200 250 billion dongs.
11
Valuation.
We assume that revenue growth rate of the current plant is 6%/year. The new plant
will come into operation in 2011 and reach 80% of the capacity in 2013.
With the WACC as of 15.5%, from 2009 to 2013 and 13% from 2014, according to
our calculation, the intrinsic value of DHG shares is 100,445 dongs.
BASIC FINANCIAL INDEXES
Unit: VND billion
2006
2007
OPERATING EFFICIENCY INDEXES

2008
2006
2007
2008
Revenue growth (%)
56,7%
46,2%
19,2%
717,698
Profit after tax growth (%)
57,2%
82,5%
7,8%
127,093
137,001
Gross profit margin (%)
54%
51%
53%
482,847
942,209
1,133,478
Net profit margin (%)
8,0%
10,0%
9,1%
Current asset
291,128
289,818
361,434
ROA (%)
14,4%
13,5%
12,1%
Non-current asset
153,297
268,421
294,838
ROE (%)
41%
20%
18%
Owners equity
603,534
580,449
738,033
EPS
8,706
6,355
6,860
Liabilities
170,441
651,577
753,295
Book value
21,305
32,579
37,720
Revenue
868,192
1,269,280
1,513,172
Cost of goods sold
402,747
627,628
69,648
Total asset
Profit after tax
Index
12
IMEXPHARM PHARMACEUTICAL JSC

SHARE INFORMATION
Highlights
Ticker:
IPM
Trading bourse:
52-week low:
48,7
52-week high:
124,0

billion):
29.531
20%
Production of high value drugs. Thanks to technological

advantages, the Company can produce high value drugs with selling
State-owned
26,04%
Foreign owned
41,42%
Other
32,35%
PRICE PERFORMANCE
IMP
120
110
100
90
80
70
60
50
100000
100000
50000
50000
A S O N D
2009
prices higher than other domestic pharmaceutical manufacturing

companies
A M J
Production expansion in the coming period
IMP is building a new plant for Cephalosphorin production in Binh
11.602.620

volume:
Technological advantages. IMP at present is the sole Vietnamese

enterprise meeting the GMP EU standards in pharmaceutical
production.
707.76
Number of outstanding shares:
120
110
100
90
80
70
60
50
HOSE
Duong province which is expected to come into operation in Q4/2009

with a total investment capital as of approximately 110 billion dongs.
It is expected that at the maximum capacity, revenue will reach 400 500
billion dongs; however, in the first two years, the expected revenue will
reach about 200 250 billion dongs.
Weaknesses in the distribution network. The distribution network of

IMP is not as strong with only 3 agents in comparison with DHG
and DMC with 20 and 75 agents respectively.
Performance in 2008
Revenue in 2008 was 561.8 billion dongs, a 24% growth compared

to 2007 thanks to increased output.
Revenue structure of the Company is divided into two parts: licensed

drugs whose production patents are obtained from Sandoz and drugs
the company produces itself. In 2008, revenue from licensed drugs
accounted for 22% of the total revenue, compared to 27% in 2007.
This reduction in revenue from licensed drugs contributed to
increase gross profit margin.
2009 prospect
It is estimated that revenue will increase 10 12% mainly thanks to
output increase.
From 2010, the new plant is expected to contribute VND 200 billion to the
companys revenue and in 2012, revenue can go up 2 times.
Valuation.
We forecast that revenue growth rate for 2009 and 2010 of the current
plant is 12%/year. This figure has taken into account the expected revenue
of 200 billion dongs in 2010 from the new plant. (50% of the capacity is
used).
According to our calculations, WACC from 2009 to 2013 is 15% and that
from 2014 is 12%. Given these figures, the intrinsic value of IMP shares
13
is 87,885 dongs/share.
2006
2007
2008
Revenue
525,406
451,602
561,844
Cost of goods sold
367,260
258,572
42,276
Total asset
Current asset
Unit: VND billion
2006
2007
2008
Revenue growth (%)
55.8%
-14.0%
24.4%
319,809
59.6%
29.0%
14.2%
54,518
62,235
30%
43%
43%
304,671
568,426
597,082
8.0%
12.1%
11.1%
260,420
469,910
398,684
ROA (%)
13.9%
9.6%
10.4%
Non-current asset
44,250
98,516
198,398
ROE (%)
18%
11%
12%
Owners equity
70,495
70,874
77,283
5,033
4,676
5,342
234,176
497,552
519,799
27,878
42,672
44,616
Profit after tax
Liabilities
Index
EPS
Book value
14
CUU LONG PHARMACEUTICAL JOINT-STOCK COMPANY

Highlights.
SHARE INFORMATION
Ticker:
DCL
Trading bourse:
HOSE
The dominating producer in the market of hard-gel capsules.
52-week low:
24,6
DCL and Suheung are two big producers of hard capsules in Vietnam. In 2008,
DCL won 30% of the overall domestic market share while Suhung just entered
52-week high:
64,0
Vietnam market.

billion):
505.22
shares:
9,715,848

volume:
16,566
20%
DCL has two hollow capsule manufacturing plants with a current capacity of about
2 billion units/year and a designed capacity of 2.5 billion units/year. With the
operation of the new Capsule II factory, DCL is expected to gain 50% - 60% of the
domestic market share.
One of the two big suppliers of syringes.
At present, DCL (with the trademark of Vikimco) and Vinahankook are two big
OWNERSHIP INFORMATON
State-owned
37.07%
Foreign owned
18.68%
suppliers of syringes. While Vinahankook is dominating the northern market share,

Vikimco is capturing the southern market share. In Ho Chi Minh city, 80% of
Other
44.25%
hospitals use Vikimcos products.
PRICE PERFORMANCE
DCL
55
50
45
40
35
30
25
55
50
45
40
35
30
25
300000
250000
200000
150000
100000
50000
300000
250000
200000
150000
100000
50000
2008
2009
Limitations in development of western drugs
Focusing on medical goods, DCL is not dominating in western drug production

although revenue from western drugs accounted for 50% of total revenue in 2008.
It is expected that the new betalactam plant will come into operation in Q3/2009
with maximum revenue of 150 billion dongs/year.
Risks of competition from Suheung
Suheung is taking the initiative in expanding their market share in Vietnam with
the increase of their production output to the corresponding figure of DCL.
In the years to come, supply surplus can happen if both DCL and Suheung produce
at their maximum capacity.
Performance in 2008.
DCL had significant changes in 2008. Revenue had a growth rate of 34%
thanks to a 50% growth in new drug production in 2008 compared to
2007. Revenue from capsules also had an increase of 20% compared to
2007, which was partly owing to the launch of the new product range of
silver capsules.
In 2008, the Company did not record the interest of loan paid to banks
because it was capitalized into the plants value.
2009 prospect.
In 2009, revenue of the Company is estimated at 650 billion dongs, including 300
billion dongs from drugs, 145 billion dongs from capsules, 55 billion dongs from
medical equipments and the rest from commercial goods.
Valuation.
On the basis of the WACC of 13% for the period of 2009- 2012 and 11% from
15
2013, our valuation result for the intrinsic value of DCL shares is 66,336 dongs.

Unit: VND billion
Revenue
Cost of goods sold
Profit after tax
Total asset
Current asset
Non-current asset
Owners equity
Liabilities
2006
2007
2008
346.497
355.490
474.667
Revenue growth (%)

294.127
267.770
350.154
10.470
41.337
51.151
266.073
127.651
399.541
257.908
Index
544.037
314.809
ROA (%)
ROE (%)
138.422
141.634
229.228
196.904
159.536
265.636
69.169
240.005
278.401
EPS
Book value
2006
2007
2008
110%
3%
34%
22%
295%
24%
15%
25%
26%
3%
12%
11%
4%
10%
9%
15%
17%
18%
1,870
5,103
5,276
12,352
29,630
28,716
16
MEKOPHAR CHEMICAL PHARMACEUTICAL JOINT-STOCK

COMPANY
SHARE INFORMATION
Ticker:
Highlights.
Being the leading company in western drug production and distribution,

especially in fusion products.
Holding about 7% of the drug market share of Vietnam
Trading bourse:
52-week low:
52-week high:
billion):
Strengths.
shares:
Mekophar at present is one of few domestic companies providing

materials for producing betalactam (amoxicilline) and perfusion and
distributing mainly through state-owned hospitals.

volume:
Mekophar satisfies all the standards of drug production, distribution and

storage (GMP, GSP and GLP). MKPs plant is among 75 ones meeting
GMP standards out of a total of 180 drug production plants in Vietnam.
State-owned
Weaknesses.
Foreign owned
Other
PRICE PERFORMANCE
Mekophar mainly distributes its products through hospitals and a number

of traditional partners. Therefore, market accessibility of the Company is
rather limited.
Future projections.
At present, MKP has delayed the project on contruction of GMP plant in

Binh Duong province in an area of 41,139.2 m2. The plant is expected to
come into operation in 2012, 2 years behind schedule.
MKP will also cooperate with VinaCapital in the investment project of

office building for lease at no. 5 Ngo Thoi Nhiem street, Dist.3, Ho Chi
Minh city. It is expected that construction will start at the middle of 2009.
In February 2009, MPK opened the research center for application and
supply of stem cells.
In the projection for the next 5 years, MPK will establish the research
center for cancer treatment named Meko CTL.

Unit: VND billion
2006
2007
2008
Revenue
346,497
355,490
474,667
Cost of goods sold
294,127
267,770
350,154
10,470
41,337
51,151
Total asset
266,073
399,541
Current asset
127,651
Non-current asset
Owners equity
Profit after tax
Liabilities
Index
2006
2007
2008
Revenue growth (%)
109.5%
2.6%
33.5%
Profit after tax growth

(%)
22.1%
294.8%
23.7%
15%
25%
26%
544,037
3.0%
11.6%
10.8%
257,908
314,809
ROA (%)
3.9%
10.3%
9.4%
138,422
141,634
229,228
ROE (%)
15%
17%
18%
196,904
159,536
265,636
EPS
1,870
5,103
5,276
69,169
240,005
278,401
Book value
12,352
29,630
28,716
17
VIDIPHAR CENTRAL PHARMACEUTICAL JSC

SHARE INFORMATION
Ticker:
Highlights.
Trading bourse:
Vidipha mainly produces antibiotics which bring 40% of total revenue and
vitamins which are focal products of the Company.
52-week low:
52-week high:
billion):
Revenue from drug production reaches 200 billion dongs/year; profit/net

revenue ratio is approximately 13.6%/year.
The Company has a number of factories meeting the standards of GMPASEAN, particularly: Non-Betalactam tablet production workshop,
Betalactam tablet production workshop, and workshop for production of
shares:
volume:
liquid injectable drug, eyewash, syrup and ointment.
Strengths
State-owned
Foreign owned
Other
A wide distribution network in different provinces, particularly through

local pharmaceutical companies.
Providing a wide range of western drugs in the market, which facilitates

Vidiphar in meeting various market demands.
PRICE PERFORMANCE
Having the intention of expanding the production of pharmaceutical

products.
Weaknesses.
Lot of shortcomings in the distribution into treatment networks.
Due attention has not been paid to research and development of new
products.
Future projections
Construction of the new plant in Binh Duong province with an investment

capital of 120 billion dongs started on February 2009 and it will come into
operation in 2011 to replace the plant in Ho Chi Minh City.
In 2009, it is projected that revenue will be 230 billion dongs and profit
will be 31 billion dongs. Revenue in 2010 and that in 2011 are forecasted
to reach 280 billion dongs and 320 billion dongs respectively.

Unit: VND billion
2006
2007
2008
Revenue
170.458
191.443
206.952
Cost of goods sold
135.572
148.668
163.049
19.439
25.529
28.188
Total asset
162.748
176.614
Current asset
126.051
Non-current asset
Owners equity
Profit after tax
Liabilities
Index
2006
2007
2008
Revenue growth (%)
n/a
12%
8%
n/a
10%
10%
20%
22%
21%
190.909
11%
13%
14%
142.847
151.920
ROA (%)
12%
15%
15%
36.697
33.767
38.989
ROE (%)
14%
16%
17%
21.998
15.184
21.162
EPS
3.888
4.255
4.698
140.750
161.431
169.747
28.150
26.905
28.291
Book value
18
APPENDIX 1: SEVERAL COMPARATIVE INDEXES OF PHARMACEUTICAL COMPANIES IN ASIA

CHINA
P/E
PEG
EV/EBITDA
(T12M)
P/B
ROE
(T12M)
5,83
2,31
Market
capitalization
(USD)
3.015.734.528
2.264.991.488
48,75
31,02
1,1
1,15
29,95
20,33
10,34
4,84
23,29
16,73
600664.SS
600196.SS
2,29
1,94
886.020.992
2.402.329.856
22,60
26,02
N.A.
N.A.
21
60
4,82
4,24
12,45
18,09
Beijing Double Crane Pharm-A

Zhejiang Medicine Co Ltd-A
600062.SS
600216.SS
3,49
2,74
1.663.948.544
1.230.931.072
24,07
143,85
1,32
N.A.
20,68
36,01
4,79
9,68
21,73
6,77
Beijing Sl Pharmaceutical -A
Zhejiang Hisun Pharmaceutica
North China Pharm Co-A
Guangdong Kangmei Pharm-A
Harbin Pharmaceutical Grou-A
Livzon Pharmaceutical Inc-B
Zhejiang Huahai Pharmaceut-A
Tonghua Dongbao Pharmaceut-A
Shenzhen Accord Pharmaceut-B
Northeast Pharmaceutical-A
002038.SZ
600267.SS
600812.SS
600518.SS
600829.SS
200513.SZ
600521.SS
600867.SS
200028.SZ
000597.SZ
5
2,4
1,45
1,86
2,29
1,34
2,08
2,34
1,07
3,03
1.242.508.544
1.078.976.512
1.486.332.032
1.423.216.000
886.020.992
703.396.992
621.455.104
860.892.288
683.285.440
1.012.580.992
63,02
37,75
167,86
33,06
22,60
5,52
28,40
76,05
16,88
132,59
0,81
1,25
2,13
N.A.
N.A.
N.A.
0,99
N.A.
N.A.
N.A.
77,82
17,81
18,53
32,15
21
11,62
17,58
58,64
26,44
27,7
15,41
4,87
8,15
4,2
4,82
1,44
3,9
3,95
4,36
7,1
27,57
13,58
4,94
8,41
23,82
30,44
14,65
5,46
28,57
5,15
Guangzhou Baiyushan Pharma-A

Zhejiang Hangzhou Xinfu Phar
000522.SZ
002019.SZ
1,05
1,39
491.884.832
264.966.352
23,27
43,09
N.A.
N.A.
18,31
18,38
4,25
3,17
20,46
7,37
Kunming Pharmaceutical Corp

China Pharmaceutical Group
United Laboratories
Extrawell Pharmaceutical
Sino Biopharmaceutical
Shandong Luoxin Pharmacy-H
Wuyi International Pharmaceu
Tongjitang Chinese Medic-Adr
600422.SS
1093 HK
3933 HK
858 HK
1177 HK
8058 HK
1889 HK
TCM US
0,91
0,4
0,32
0,25
0,15
0,28
0,07
3,69
284.899.648
611.822.080
386.981.920
581.930.496
341.684.768
168.278.320
125.713.696
124.860.096
67,01
5,96
4,72
N.A.
9,74
6,28
3,22
18,95
N.A.
0,02
0,39
N.A.
0,26
0,21
N.A.
0,79
26,95
3,62
5,04
464,23
N.A.
N.A.
N.A.
N.A.
3,39
1,19
1,12
14,98
1,27
2,34
0,61
0,69
5,19
23,56
27,06
-4,46
13,67
45,03
20,52
3,7
CCM DUOPHARMA
APEX HEALTHCARE
CCMD MK Equity
APEX MK Equity
0,56
0,34
78,78M
25,25M
10,54
6,29
1,29
N.A.
6,04
5,07
2,22
0,65
22,39
10,7
YSP SOUTHEAST AS
YSP MK Equity
0,24
16,59M
4,87
N.A.
N.A.
0,49
10,36
MERK IJ Equity
KLBF IJ Equity
DVLA IJ Equity
TSPC IJ Equity
PYFA IJ Equity
SQBB IJ Equity
MERK IJ Equity
2,67
0,05
0,12
0,04
0,01
N.A.
2,67
59.845.544
542.671.552
65.456.064
167.188.480
2.680.426
N.A.
59.845.544
7,27
10,68
9,71
6,85
6,11
N.A.
7,27
N.A.
0,55
N.A.
0,69
N.A.
N.A.
N.A.
3,98
5,42
5,49
2,88
N.A.
N.A.
3,98
2,19
1,78
1,56
0,95
0,45
N.A.
2,19
32,47
17,71
16,97
13,84
N.A.
46,18
32,47
Hau Giang Pharmaceutical JSC

Domesco Medical Import- Export JSC
DHG VN Equity
DMC VN Equity
6,01
2,25
120.070.808
30.579.908
13,81
8,08
N.A.
N.A.
2,89
1,14
20,36
14,41
Imexpharm Pharmaceutical JSC

Cuu Long Pharmaceutical JSC
IMP VN Equity
DCL VN Equity
3
1,04
35.011.472
19.838.470
9,84
6,78
5,77
6,23
1,18
1,25
12,25
19,77
Traphaco JSC
Ha Tay Pharmaceutical JSC
TRA VN Equity
DHT VN Equity
2,29
1,12
18.302.448
4.597.961
6,95
6,98
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
5,12
N.A.
1,24
0,97
N.A.
N.A.
Code
(Bloomberg)
Price
Jiangsu Hengrui Medicine Co

Sanjiu Medical & Pharmace-A
600276.SS
000999.SZ
Harbin Pharmaceutical Grp-A

Shanghai Fosun Pharmaceutica
Company name
MALAYSIA
INDONESIA
MERCK TBK PT
KALBE FARMA
DARYA VARIA LABO
TEMPO SCAN PACIF
PYRIDAM FARMA
BRISTOL-MYERS
MERCK TBK PT
VIETNAM
19
APPENDIX 2: SEVERAL COMPARATIVE RATIOS OF PHARMACEUTICAL COMPANIES

Ratios
Liquidity
Current ratio
Quick ratio
Capital structure
Debt/Total asset ratio
Debt/ Owners equity ratio
Operating ratio
Receivables turnover
Payables turnover
Inventories turnover
Profitability ratio
Profit after tax/ Net sales
Profit after tax/ Onwers equity
Profit after tax/Total asset
Operating profit/ Net sales
Share ratio
EPS
Book value
P/E
P/B
DHG
IMP
DCL
DMC
Vidipha
Mekophar
Average
99,2
62,0
99,7
60,9
4,0
2,2
10,2
5,6
(*)
(*)
(*)
(*)
53,3
32,7
0,0
0,0
0,0
0,0
0,3
0,7
0,1
0,1
0,0
0,0
0,0
0,0
0,1
0,1
6,7
9,5
2,3
6,5
7,0
2,2
3,3
7,9
2,8
6,5
10,4
4,4
4,9
12,5
5,0
9,4
23,3
2,4
5,6
9,4
3,3
9%
18%
12%
10%
11%
12%
10%
13%
11%
18%
9%
12%
7%
14%
11%
9%
14%
17%
15%
12%
10%
18%
15%
13%
10%
16%
12%
12%
6.803
37.720
17,2
3,1
5.342
44.616
10,3
1,2
5.276
28.716
8,6
1,6
5.296
37.551
8,1
1,1
4.698
28.291
(*)
(*)
8.385
45.571
(*)
(*)
5.967
37.078
11,1
1,8
Source: Financial reports of the companies
20
APPENDIX 3: FINANCIAL REPORTS OF COMPANIES IN THE REPORT

HAU GIANG PHARMACEUTICAL JSC
INCOME STATEMENT
Indexes
Net sales
Cost of goods sold
Gross profit
Gross profit margin
Interest payable
Selling expense
General administration expense
Net operating profit
Income from financial activities
Other income
Profit before tax
Tax
Net profit
Net profit margin
2006 A
868,192
402,747
465,445
54%
10,705
311,953
55,881
86,906
5
149
87,060
17,412
69,648
8%
2007 A
1,269,280
627,628
641,652
51%
14,839
442,839
60,319
123,656
3,247
190
127,093
0
127,093
10%
2006 A
2007 A
35.002
154.257
121.353
18.937
329.550
143.167
4.975
1.609
3.546
482.847
167.870
18.478
104.780
291.128
260
21.018
312.406
80.000
16.913
73.528
170.441
482.847
129.951
51.955
235.439
230.279
26.163
673.787
216.567
12.214
38.225
1.415
942.209
43.430
55.642
190.746
289.818
767
47
290.631
200.000
378.761
1.219
71.597
651.577
942.209
2008 A
1,513,172
717,698
795,474
53%
5,216
528,457
100,943
160,859
(10,494)
2,655
153,019
16,018
137,001
9%
2009 E
1,600,000
758,881
841,119
53%
5,515
558,780
106,735
170,089
2010 F
1,691,810
802,426
889,384
53%
5,832
590,844
112,860
179,849
170,089
17,009
153,080
10%
179,849
17,985
161,864
10%
2008 A
2009 E
2010 F
211.742
2.337
225.957
308.202
90.402
838.640
224.355
2.003
66.697
1.784
1.133.478
8.455
75.870
277.108
361.434
15.165
376.599
200.000
378.761
(293)
137.088
37.738
753.295
3.584
1.133.478
188.979
2.337
238.923
325.887
90.402
846.527
315.519
2.003
66.697
1.784
1.232.529
8.455
80.224
277.108
365.788
15.165
380.953
200.000
378.761
(293)
198.300
78.545
855.314
4.718
1.240.985
185.345
2.337
252.632
344.587
90.402
875.303
403.284
2.003
66.697
1.784
1.349.070
8.455
84.827
277.108
370.391
BALANCE SHEET
Index
Cash
Short-term investment
Commercial receivables
Inventories
Other current assets
Total current assets
Net fixed assets
Construction in progress
Long-term investment
Other long-term investment
Total asset
Short-term borrowings
Trade creditors
Other short-term borrowings
Total short-term borrowings
Long-term debts and loans
Other
Total non-current liabilities
Chartered capital
Issuing surplus
Treasury shares
Retained earnings
Funds
Total owners equity
Minority shareholders interest
Total Liabilities and Owners Equity
15.165
385.556
200.000
378.761
(293)
264.782
122.867
966.117
5.852
1.357.525
21
IMEXPHARM
INCOME STATEMENT
Index
2006 A
2007 A
2008 A
2009 E
2010 F
Net sales
Cost of goods sold
Gross profit
Gross profit margin
Interest payable
Selling expense
Other income
Profit before tax
Tax
Net profit
Net profit margin
525.406
367.260
158.146
30%
2.383
98.699
12.813
44.251
55
2.808
47.114
4.838
42.276
8%
451.602
258.572
193.030
43%
750
113.380
21.930
56.970
5.376
884
63.231
8.712
54.518
12%
561.844
319.809
242.036
43%
533
145.012
25.325
71.165
3.608
(4.355)
70.417
8.183
62.235
11%
629.266
358.186
271.080
43%
7.350
162.414
30.557
70.759
904.777
515.011
389.767
43%
7.563
233.523
43.936
104.744
70.759
7.076
63.683
10%
104.744
20.949
83.795
9%
Index
2006 A
2007 A
2008 A
2009 E
2010 F
Cash
Inventories
Net fixed assets
Total asset
Trade creditors
Other
Chartered capital
Issuing surplus
Treasury shares
Retained earnings
Funds
Total owners equity
65.607
49.833
129.765
15.215
260.420
31.069
3.999
1.575
7.608
304.671
4.052
30.920
35.037
70.009
486
486
84.000
80.931
39.065
30.179
234.176
304.671
49.244
155.295
50.057
137.818
77.496
469.910
41.201
3.161
23.069
31.085
568.426
4.000
38.219
27.953
70.172
701
701
116.598
278.108
50.371
52.475
497.552
568.426
39.418
97.169
85.830
148.255
28.012
398.684
117.357
14.620
39.176
27.245
597.082
4.000
45.800
25.195
74.995
2.288
2.288
116.598
278.108
(94)
48.075
77.111
519.799
597.082
32.575
97.169
96.130
166.045
28.012
419.931
207.988
14.620
39.176
27.245
708.960
20.000
51.296
25.195
96.491
50.000
2.288
148.779
116.598
278.108
(94)
61.203
104.365
560.181
708.960
18.866
97.169
138.218
238.745
28.012
521.010
188.619
14.620
39.176
27.245
790.670
28.757
73.755
25.195
127.707
40.000
2.288
169.995
116.598
278.108
(94)
93.430
132.632
620.675
790.670
BALANCE SHEET
22
CUU LONG PHARMACEUTICAL

INCOME STATEMENT
Index
2006 A
2007 A
2008 A
2009 E
2010 F
Net sales
Cost of goods sold
Gross profit
Gross profit margin
Interest payable
Selling expense
Other income
Profit before tax
Tax
Net profit
Net profit margin
346.497
294.127
52.370
15%
12.715
14.913
11.837
12.904
(690)
(1.745)
10.470
0
10.470
3%
355.490
267.770
87.720
25%
9.099
19.197
13.611
45.812
808
(690)
45.930
4.593
41.337
12%
474.667
350.154
124.514
26%
13.311
36.692
15.699
58.812
(2.097)
120
56.835
5.683
51.151
11%
625.321
463.037
162.285
706.463
527.542
178.922
25.439
54.403
18.823
63.620
22.161
61.462
21.266
74.033
63.620
6.362
57.258
9%
74.033
7.403
66.629
9%
Index
2006 A
2007 A
2008 A
2009 E
2010 F
Cash
Inventories
Net fixed assets
Total asset
Trade creditors
Other
Chartered capital
Issuing surplus
Treasury shares
Retained earnings
Funds
Total owners equity
9.564
45.314
59.848
12.926
127.651
136.825
589
1.008
266.073
72.798
70.139
34.657
177.593
19.222
88
19.311
56.000
415
1.156
11.598
69.169
266.073
6.308
133.214
91.327
27.058
257.908
135.758
4.868
1.008
399.541
4.330
60.918
58.271
123.518
35.836
182
36.017
81.000
110.557
36.435
12.013
240.005
399.541
13.346
142.353
123.727
35.383
314.809
217.116
11.105
1.008
544.037
79.691
44.115
33.784
157.590
107.742
304
108.046
97.193
110.557
(242)
45.863
25.030
278.401
544.037
8.092
7.891
187.534
163.614
35.383
394.623
229.118
3.000
1.008
627.749
135.000
58.336
33.784
227.121
84.056
304
311.481
97.193
110.557
(242)
72.370
36.391
316.268
627.749
211.869
186.407
35.383
441.549
219.921
3.000
1.008
665.478
142.000
66.463
33.784
242.247
60.837
304
303.388
97.193
110.557
(242)
104.445
50.137
362.090
665.478
BALANCE SHEET
23
VIDIPHA
INCOME STATEMENT
Index
2006 A
2007 A
2008 A
Net sales
Cost of goods sold
Gross profit
Gross profit margin
Interest payable
Selling expense
Other income
Profit before tax
Tax
Net profit
Net profit margin
170.458
135.572
34.886
20%
1.584
3.843
8.682
20.777
389
433
21.599
2.160
19.439
11%
191.443
148.668
42.775
22%
6.501
10.662
25.612
3.227
(227)
28.612
3.083
25.529
13%
206.953
163.049
43.904
21%
7.060
11.328
25.516
5.419
218
31.153
2.965
28.188
14%
BALANCE SHEET
Index
2006 A
2007 A
2008 A
Cash
Inventories
Net fixed assets
Total asset
Trade creditors
Other
Chartered capital
Issuing surplus
Treasury shares
Retained earnings
Funds
Total owners equity
47.415
0
41.694
32.550
4.393
126.051
34.405
0
2.292
0
162.748
0
8.568
13.274
21.841
157
0
157
50.000
61.803
0
28.947
0
140.750
162.748
59.208
0
49.584
33.242
814
142.847
29.442
0
4.325
0
176.614
0
8.884
6.063
14.947
236
0
236
60.000
61.803
0
37.976
1.652
161.431
176.614
73.119
0
44.019
32.727
2.055
151.920
35.040
240
3.709
0
190.909
0
13.056
7.814
20.869
292
0
292
60.000
52.464
0
56.966
317
169.747
190.909
24
MEKOPHAR
INCOME STATEMENT
Index
2006 A
2007 A
2008 A
Net sales
Cost of goods sold
Gross profit
Gross profit margin
Interest payable
Selling expense
Other income
Profit before tax
Tax
Net profit
Net profit margin
467.179
348.306
118.873
25%
3.041
21.069
34.065
60.697
(858)
3.425
63.264
6.971
56.293
12%
545.487
376.687
168.800
31%
90
33.524
52.836
82.350
1.057
1.932
85.339
22.555
62.784
12%
596.028
437.185
158.843
27%
276
38.711
41.425
78.431
(203)
1.956
80.183
18.520
61.663
10%
Index
2006 A
2007 A
2008 A
Cash
Inventories
Net fixed assets
Total asset
Trade creditors
Other
Chartered capital
Issuing surplus
Treasury shares
Retained earnings
Funds
Total owners equity
40.931
3.800
75.267
151.695
9.170
280.863
33.656
0
8.490
0
323.009
0
7.426
45.487
52.913
45.200
8.646
96.717
161.737
6.250
318.551
48.612
0
18.590
0
385.753
0
9.786
40.410
50.196
13.609
9.156
80.330
182.544
11.573
297.212
89.175
0
15.090
0
401.476
0
18.735
34.099
52.835
BALANCE SHEET
5.257
5.257
84.000
106.639
-20.945
79.375
15.769
264.839
323.009
20.427
20.427
84.000
107.702
-13.500
112.328
24.600
315.130
385.753
13.495
13.495
92.100
107.702
-18.556
126.351
27.549
335.147
401.476
25
DISCLAIMER
All information in this report has been verified carefully; however Bao Viet Securities Joint-stock Company (BVSC) will
take no responsibilities with regard to the accuracy of the information. Viewpoints, comments and judgments in this
report are of personal stance of analysts and do not represent the stance of BVSC.
This report is for the purpose of providing information and does not intend to advise the readers to buy, sell or hold any
securities. Readers should only use this analysis report as a source of reference.
BVSC can have business cooperation activities with the subjects mentioned in this report. Readers should be noticed that
BVSC can have conflicts of interest with investors when they implement this analysis report.
CONTACT
Bao Viet Securities Joint-stock Company
Head office
Ho Chi Minh city branch

Address:
6 Le Thanh Ton, Dist. I, HCM city
Address:
No. 8 - Le Thai To, Hoan Kiem, Ha Noi
Tel:
(84) 4 3 928 8080
Fax:
(84) 4 3 928 9899
Tel:
(84) 8 3 821 8564
Email:
research@bvsc.com.vn
Fax:
(84) 8 3 914 7477
11 - Nguyen Cong Tru, Dist. I, HCM city
SECTOR ANALYSIS DIVISION

DEPUTY OF THE DIVISION
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PHARMA INDUSTRY REPORT

Bao Viet Securities Company

The industry in the growth period

Dependence on imported materials

The majority of drugs are low-end products

Typical distribution network

Competition from foreign pharmaceutical corporations

Undeveloped R&D in Vietnam

Tel: (844) 3 928 8080.

THE TREND OF THE PHARMACEUTICAL INDUSTRY IN 2009

Fax: (844) 3 928 9888.

HAU GIANG PHARMACEUTICAL JOINT-STOCK COMPANY

IMEXPHARM PHARMACEUTICAL JSC

CUU LONG PHARMACEUTICAL JOINT-STOCK COMPANY

BVSC HCMC Branch

MEKOPHAR CHEMICAL PHARMACEUTICAL JSC

11 Nguyn Cng Tr, Qun 1

VIDIPHAR CENTRAL PHARMACEUTICAL JSC

6 L Thnh Tn, Qun 1

GMP: Good Manufacturing Practice.

GLP: Good Laboratory Practice.

GSP: Good Storage Practice.

GMP-WHO: GMP standard of WHO

BMI: Business Monitor International

OTC: Non-Prescription drugs

Patent drugs : a drug or remedy protected by a trademark, available without a

HIGHLIGHTS OF VIETNAM PHARMACEUTICAL INDUSTRY

The industry in the growth period

Spending on drug per person (USD)

2001 2002 2003 2004 2005 2006 2007 2008

Source: Drug Administration of Vietnam

Source: Drug Administration of Vietnam

Source: Ministry of Health

Besides increase in production output, pharmaceutical manufacturing companies are also

Source: Drug Administration of Vietnam

Dependence on imported materials

Pharmaceutical materials exported to Vietnam

Types of imported pharmaceutical materials

Antipyretic, painrelief, antipasmodic

Source: Trade Review magazine

Source: Trade Review magazine

Risks from exchange rate difference. In 2008, most of pharmaceutical companies

Risks from quality of pharmaceutical materials. Pharmaceutical materials imported

The majority of drugs are low-end products

On the basis of pharmaceutical compounding patents, pharmaceutical products are

Typical distribution network

Firstly, selling through hospitals occupies a high amount of working capital of

Secondly, foreign pharmaceutical companies with financial advantages give a high

Drug distribution structure in hospitals in 2008

Quantity of units in the treatment network

Local general practice surgeries

Treatment and functional recovery hospitals

Medical aid stations of communes, districts

Medical aid stations of organs and companies

Source: Drug Administration of Vietnam

Source: Ministry of Health

Commercial distribution network structure

Import export companies

Source: Drug Administration of Vietnam

Source: Ministry of Health

To expand their branches, pharmaceutical companies have to build up warehouses

Competition from foreign pharmaceutical corporations

Revenue of several pharmaceutical companies in VN