Domestic pharmaceuticals stocks send good vibes to Abbott and Taisho

Pharma stocks radiated positive signals to foreign investors

Speaking about the investment and divestment activities between Vietnam-based pharmaceuticals and foreign investors, a representative of State Capital Investment Corporation (SCIC) disclosed that 34.71 per cent capital at Domesco Medical Import Export Joint Stock Corporation (HSX: DMC) is on its divestment agenda in April.

US-based multinational healthcare firm Abbott has already expressed a wish to participate in the divestment.

In late 2017, Latin American CFR International SpA, DMC’s former largest shareholder, transferred its entire ownership of 51.69 per cent to its parent company, Chile-based Abbott Laboratories Holdco SpA shortly before the firm’s extraordinary general shareholders’ meeting. In 2018 the Vietnam-based firm plans to acquire VND1.468 trillion ($64.44 million) in sales revenues and VND225 billion ($9.87 million) in pre-tax profit which would be 9.6 and 8 per cent higher than in 2017.

Likewise, DHG Pharmaceutical JSC (HSX: DHG) plans to present its target of raising foreign ownership at the firm to 100 per cent at the March 28 AGM.

DHG also aimed at merging with its two subsidiaries, MTV DHG1 JSC (specialised in packaging printing) and MTV DHG Pharmaceuticals JSC, expecting to earn VND4.017 trillion ($176.34 million) in sales revenue and VND768 billion ($33.71 million) in after-tax profit by the end of 2018.

In addition, the starting price of DHG's stocks is expected to hit VND130,000-145,000 ($5.71-6.37) once the merger with its two subsidiaries is finalised on July 1 and its plan of increasing foreign ownership in the second quarter of 2018 is approved by shareholders.

Previously, Japan-based Taisho Pharmaceutical, DHG's key shareholder, disclosed its expectation to raise ownership at the Vietnamese pharmaceutical firm.

According to Ho Chi Minh City Securities Company (HSC), the ratio of EV/EBITDA (enterprise value over earnings before interest, taxes, depreciation and amortisation) among seven randomly selected Vietnam-based pharmaceuticals ranged from 17 to 19 throughout M&As.