Foreign investors strike big as Vietnamese firms enter new growth cycle

The wave of foreign investors taking deeper stakes in Vietnamese firms over the past decade is revealing a clear reality: these investments not only deliver attractive financial returns, but also help restructure businesses, elevate governance standards and open up new growth cycles.

Pharmaceutical is one of the fields grabbing foreign investors' special attention

A typical example is Binh Minh Plastics. Since coming under Thai ownership, the company has not only maintained its industry-leading position, but has also continuously set records in operating efficiency.

In 2025, Binh Minh Plastics posted revenue of $220.4 million, up 19 per cent, while after-tax profit reached $49.2 million, up 24 per cent and the highest level in its history. Gross profit margins improved markedly, rising from below 43 per cent to around 47 per cent within just one year.

Notably, the company’s financial structure has become healthier than ever, with cash and deposits accounting for as much as 61 per cent of total assets, while long-term debt is almost entirely absent.

In the pharmaceutical sector, the trend is even more pronounced, as many long-established domestic companies with strong brands are becoming increasingly attractive after partnering with foreign strategic investors.

At Hau Giang Pharmaceutical, the participation of Japanese strategic shareholder Taisho Pharmaceutical has brought significant changes to the company’s development orientation. After a period of adjustment, the business is now entering a new growth cycle.

The company’s AGM documents for 2026 show an ambition to return to its ‘golden era’, with a revenue target of $221.2 million and after-tax profit of $40.3 million, representing increases of 5 per cent and more than 18 per cent on-year, respectively.

If achieved, this would not only mark a record-high revenue figure but also the return of trillion VND-level profits, a milestone the company reached during its previous peak period.

Beyond growth, Hau Giang Pharmaceutical continues to maintain a very high cash dividend policy, with a planned payout ratio of up to 100 per cent for 2025, equivalent to more than $52 million. This is particularly attractive for long-term investors, especially amid ongoing volatility in global interest rates.

With a more balanced shareholder structure than DHG, Traphaco has opted for deeper cooperation in technology and product development – a strategy that is already delivering clear results.

The company has set a 2026 target of nearly $120 million in revenue and $12.2 million in after-tax profit, both representing growth of 10 per cent.

More notably, its long-term strategy for 2026-2030 aims for a compound annual growth rate of 10 per cent, alongside a push into modern retail and hospital distribution channels.

At the same time, the company is strengthening technology transfer cooperation with South Korean partners, targeting high-quality modern pharmaceuticals – a segment with strong margins and significant growth potential.

Thanks to its solid performance, Traphaco has also maintained generous cash dividend payouts, with a 40 per cent ratio for two consecutive years, following several years at 30 per cent.

These stories are far from isolated. In reality, foreign investors continue to actively seek opportunities in companies with three core attributes.

First, strong brand foundations and long operating histories. Companies such as Hau Giang Pharmaceutical, Traphaco and Binh Minh Plastics all boast decades of development, extensive distribution networks and high levels of consumer trust.

Second, a domestic market with ample room for growth. Vietnam, with its large population, rapidly expanding middle-class and rising consumer demand, is a ‘gold mine’ for sectors such as pharmaceuticals, consumer goods and construction materials.

Third, the potential for upgrading through governance and technology. This is the ‘hidden value’ that foreign investors recognise: with improved governance, optimised operations or technological upgrades, companies can significantly boost profits without the need for large-scale expansion.

A noteworthy point is that successful deals rarely stop at capital injection. Foreign investors often bring entire ecosystems, ranging from technology and governance to supply chains and export markets.

This enables Vietnamese companies not only to scale up, but also to enhance the quality of growth. Binh Minh Plastics’ margin improvements, Hau Giang Pharmaceutical’s move towards international standards and Traphaco’s shift to high-tech pharmaceuticals all stand as clear examples.

Vuong Thi Huyen, CEO of Fast Capital, a Vietnam-based investment firm focused on private equity and growth-stage investments, noted that amid ongoing volatility in global capital markets, Vietnam continues to stand out as an attractive destination thanks to its stable economic growth and favourable demographic structure.

Companies with solid foundations, transparent governance and strong expansion potential are expected to remain prime targets for foreign capital inflows.

What foreign investors need to know to unlock new deals As Vietnam’s economy continues its strong growth trajectory, mergers and acquisitions (M&A) have become an increasingly important pathway for foreign investors seeking to enter and expand within the Vietnamese market.

New rules ease foreign access to Vietnam equities Circular 08 introduces a series of amendments to securities market regulations, aimed at facilitating foreign investor participation and enhancing regulatory efficiency.

Foreign investors target core assets in Vietnam’s evolving M&A landscape Vietnam’s mergers and acquisitions landscape is entering a more sophisticated phase, with foreign investors increasingly targeting core business segments rather than entire enterprises, reshaping deal structures and pre-transaction strategies.