Increasing demand for medicine amid the Covid-19 pandemic has helped most pharmaceutical enterprises in Vietnam report positive business results in the first quarter of this year.

Pharmaceutical stocks have attracted investors since the outbreak of the disease due to rising need for medical equipment and drugs, as well as forecasts that the pandemic may be prolonged due to the long timeline of vaccine manufacturing.

DHG Pharmaceutical JSC (DHG), the largest Vietnamese pharmaceutical firm by market capitalisation and revenue, recorded the highest profit among the listed pharmaceutical firms in the first quarter at 177 billion dong ($7.6 million).

This represented an increase of 31 per cent year-on-year, fulfilling 27 per cent of the yearly target.

DHG was followed by Pymepharco JSC (PME) and Imexpharm Corp (IMP) with 75 billion and 41 billion dong, up eight and 13 per cent against last year, respectively.

IMP expects its business to grow strongly thanks to the ethical or prescription drugs (ETC) channel. Revenue this year is expected to reach 1.75 trillion dong, up 23.3 per cent from the same period last year.

Pre-tax profit is estimated to reach 260 billion dong, up 17 per cent. Therefore, the company has completed 17 per cent of this year’s revenue plan and 20 per cent of the profit plan.

Shares of IMP decreased by 14.5 per cent from an all-time high of 62,000 dong per share, recorded on February 24, to 52,900 dong per share on Monday.

In the first quarter, Agimexpharm Pharmaceutical JSC’s (AGP’s) revenue increased slightly by 1.2 per cent year-on-year to 131 billion dong.

However, profit dropped by nearly 12 per cent to 8.2 billion dong.

The pharmaceutical industry is also expected to grow strongly thanks to the ageing Vietnamese population and the increasing demand for health care services, especially in the context of the Covid-19 outbreak.

However, the pandemic may bring advantages to the industry in the short term, but if it is prolonged, it will harm supplies of imported raw materials from China. This will force pharmaceutical enterprises to switch to importing from other regions at higher prices.

Binhdinh Pharmaceutical and Medical Equipment JSC (DBD) said more than 80 per cent of the main raw materials for the company’s products were imported from China.

But due to the disease, many factories in China had to halt operation, it said.

Domesco Medical Import-Export JSC (Domesco) also said it was facing a production halt and interruptions in some products that rely heavily on imported raw materials from China.

Backward trading

Although recording positive earning results, many pharmaceutical stocks could not maintain the uptrend and have been retreating recently.

After reaching nearly 100,000 dong per share at the end of January, shares of Pharmaceutical JSC (DHG) quickly decreased to hover at around 90,000 dong.

Compared to early this year, DHG has recorded a decrease of about six per cent.

Ha Tay Pharmaceutical JSC (DHT) surprised investors as it surged to nearly 60,000 dong per share early in February while in previous months, its shares hovered at a price of less than 50,000 dong per share.

However, DHT has dropped deeper since then, closing on Monday at 45,000 dong per share.

Vietnam International Securities Co’s (VIS’) Nguyen Hong Khanh said pharmaceutical shares are often traded thinly as most stay in the hands of a few insiders, which makes it easier to push prices.

“As pharmaceutical stocks have a low free transfer rate, price movements in the short term will be unpredictable, especially if the demand increases sharply,” said Khanh.