Pharma stocks on the rise
Pharmaceutical stocks, which are seen as a hedge, have become a cash flow magnet.
The pharmaceutical industry has emerged as an attractive option, despite the recent fluctuations on the domestic market, attracting investment flows and propelling stock prices to unprecedented levels.
Since the beginning of November, this stock group has witnessed positive shifts.
One standout performer is DHT shares of Hataphar. In the week to December 3, DHT saw a remarkable surge, maintaining a consistent upward trajectory. With a closing price of VNĐ108,300 per share (US$4.26) on December 3, DHT continues to break historical records, setting new highs across four consecutive trading sessions.
The price of DHT has skyrocketed since May, climbing from around VNĐ27,000 per share to VNĐ108,300, marking a fourfold increase. This outstanding growth has positioned DHT as the top-performing stock in the pharmaceutical sector, even ranking as one of the best-performing stocks on the stock exchange in over six months.
At this price level, DHT boasts a price to earnings (P/E) ratio of 120, pulling its market capitalisation to over VNĐ8.9 trillion. This positions DHT ahead of Imexpharm and Vinapharm, securing the second spot in Việt Nam's pharmaceutical industry, trailing only behind DHG Pharma.
The company's remarkable ascent can be attributed to favourable amendments in the Pharmaceutical Law, introducing seven fundamental improvements.
Additionally, strategic shareholder ASKA Pharmaceutical from Japan has been steadily increasing its stake in Hataphar, indicating confidence in the company's future prospects.
Most recently, ASKA Pharmaceutical has disclosed its intention to acquire nearly 2.2 million DHT shares, potentially elevating its ownership to over 38 per cent of the company's capital. This move, if successful, could amount to a transaction value of approximately VNĐ220 billion.
The Japanese company currently holds over 29.3 million DHT shares, equivalent to 35.61 per cent of Hataphar's stake.
Meanwhile, DBD shares of Bidiphar have also witnessed a surge in prices since November 27, reaching new all-time highs. Investors are apparently optimistic about the company's promising business performance.
DBD started the year at VNĐ43,360 per share and closed December 3 at VNĐ59,000, up over 30 per cent.
The pharmaceutical sector's robust growth can be attributed to several factors, including strong growth potential, high dividend yields and a positive outlook for the industry's future.
In 2023, DHG Pharma paid a cash dividend at a rate of 75 per cent, Traphaco distributed dividends of 40 per cent, Pharmedic allocated a cash dividend of 191 per cent, while Bidiphar has consistently maintained a dividend range of 15 - 30 per cent over the years.
Bullish prospects
Analysts at Việt Dragon Securities highlight two key factors driving the country's pharmaceutical industry towards sustained growth: the ageing population and rising per capita income.
With the elderly population expected to grow significantly by 2050, the demand for healthcare products is predicted to surge, benefitting pharmaceutical companies.
According to the General Statistics Office, the country's elderly population is projected to double by 2050, reaching 29.22 million people or 25.35 per cent of the total population.
Prescription drug sales are forecast to reach $5.7 billion by 2025, representing 76.6 per cent of total pharmaceutical revenue. Meanwhile, the over-the-counter (OTC) segment is expected to generate $2.2 billion in revenue by 2024, driven by private investment and expanding healthcare services.
As Việt Nam aims to domestically produce 80 per cent of its pharmaceuticals by 2030, becoming a regional hub for high-value drug production, pharmaceutical companies are increasing capital and forming strategic partnerships, such as Bidiphar's share offering and DHG Pharma's new Japanese GMP-standard plant.
Meanwhile, Traphaco is enhancing its research and development capabilities, investing in production line upgrades and new facilities to expand its export market in Southeast Asia. — VNS
