VFMVF4 – 03/2017
Concluding the 1st Quarter of 2017 VFMVF4 NAV per share (NAVPS) has appreciated by 9.2% YTD compared to the return 8.6% of the market. %. The main contributors to VF4 return include Pharmaceutical products (+41.2%), Transportation and Real Estate (+19.4%). In 2017, the Pharmaceuticals industry is expected to have positive supports for domestic producers, resulting from the application of EU-GMP standards in drug auction. The general trend of the industry will be improving drugs’ quality in auctioning and preventing direct price-competition between local firms. Several industry leaders, such as Imexpharm, Hau Giang Pharma, Traphaco has upgraded its factory to the new standard to prepare for all upcoming legal changes.
Hau Giang Pharma Corporation (HOSE:DHG) is the domestic industry leader of pharmaceutical products. The company has acquired 11% of total Vietnam Pharmaceuticals market share and 5% of domestic-produced drugs (according to statistics from the Department of Drug Administration in Vietnam). DHG has a wide-spread distribution channel across Vietnam with 12 subsidiaries, 24 branches and thousands of partner drugstores. In 2016, DHG recorded revenue of VND 4,153 billion and net profit after tax of VND 713 billion, earning per share reached VND 6,993. In 2017, we estimate the firm’s revenue and NPAT will be VND 4,250 billion and 780 billion, respectively growth of 2.3% and 9.3%
As of the end of March 2017, VF4 only held 1.5% of its assets in cash. The allocation is expected to remain stable in the near future as the fund has completed its investment in new opportunities. Besides, VF4 will consider to reap its profit in the investments that already meet expected return in order to optimize the capital allocation.