On November 5, 2024, Imexpharm hosted an online earnings presentation attended by over 60 representatives of investment funds, financial institutions and securities firms, both domestic and international. The presentation reviewed Imexpharm’s business results for Q3 and the first nine months of 2024 (“9M2024”), and provided an opportunity for participants to ask questions about the company’s activities during the final quarter of 2024 and its strategic objectives for 2025. This is part of Imexpharm’s ongoing commitment to applying international best practice standards to its investor communications.
Comprehensive Growth in Q3 Strengthens Imexpharm’s Position Within a Complex Operating Environment
Imexpharm is well positioned for a robust final quarter, having recently reported a Q3 performance that has re-energized its growth. The company achieved net revenue growth of 12% year-on-year in 9M2024, significantly outpacing the 4% growth it estimates that the rest of the market achieved during the same period. Similarly, Imexpharm retained a level of profitability over the first nine months of 2024 that was ahead of the market. A 12% decrease in PBT compared to a market average decrease of 17% demonstrates the company’s strong and effective management strategy in a complex external environment.
Overall, Imexpharm believes this performance shows the company’s resilience in a challenging market. Validating Imexpharm’s approach is its impressive performance in Q3. This saw strong growth across all key financial metrics, including net revenue, EBITDA and PBT. Net revenue for Q3 reached VND 545 billion, up 17% year-on-year (YoY) and 5% quarter-on-quarter (QoQ). EBITDA was VND 118 billion, a 3% YoY and 7% QoQ increase, while PBT reached VND 91 billion, up 5% YoY and 10% QoQ.
ETC Channel Drives Growth Momentum
Strong growth in the ETC channel continues to be a key driver for Imexpharm. Revenue from this channel grew by 57% YoY in 9M2024, compared to the market’s overall growth of just 11% in H1 (the most recent data available). Coupled to this, the company’s strategy for the OTC channel has produced a recovery in this area. By focusing on developing partnerships with pharmacy chains, it saw impressive revenue growth of 182% during Q3, helping its combined OTC revenues to grow by 8% in an overall slow market. Revenue from pharmacy chains nearly doubled QoQ (+91%) and tripled YoY, while sales from retail pharmacies grew by 7% YoY and 10% QoQ.
Optimizing Production and Enhancing Financial Efficiency
In Q3, the company prudently adjusted production at its factories to maintain an effective operating rhythm.
As part of this, it optimized inventory levels and temporarily paused one line at IMP1 to carry out scheduled maintenance. It also realigned production timelines at IMP3 to match updated customer delivery requirements. Production at both plants will resume in full during Q4, ensuring no disruption to overall plans nor any delay in fulfilling customer commitments.
Also as part of this process, Imexpharm has steadily been boosting capacity at its IMP4 factory to match market demand for its EU-GMP injectables. Increasing focus on higher-value products such as these are a key part of how Imexpharm will power its future success. IMP4 also recently started to generate positive cashflow, and is expected to reach break-even point during Q4, benefitting the company even further.
A highlight of Q3 was the certification of a twelfth production line as EU-GMP compliant. This is a significant milestone that solidifies Imexpharm’s commitment to international-quality drug production. The company is also advancing long-term goals through the Cát Khánh Pharmaceutical Factory Complex in Đồng Tháp province, which will have a scale of 25.000 m2.
New Leadership Team Members Bring Additional Strategic Expertise
On October 30, 2024, Imexpharm announced a Board of Directors' Resolution to elect Mr. Sung Min Woo (Matthew) as Chairman for the 2023-2027 term. With over 20 years of experience helping Asian corporates become industry leaders, Mr. Woo has an in-depth understanding of Vietnam’s pharmaceutical sector. He is currently Vice President of SK Inc., and Head of SK’s Ho Chi Minh City office.
Imexpharm also recently appointed Ms. Le Nu Minh Hoai as Deputy CEO and Chief Commercial Officer. Previously CEO of United International Pharma, Ms. Hoai has 30 years of experience in the industry, both internationally and in Vietnam. She is a licensed pharmacist, having graduated from Ho Chi Minh City University of Medicine and Pharmacy, and holds an MBA from Maastricht School of Management in the Netherlands.
Supportive Regulatory Environment: Catalyst for Long-Term Growth
Vietnam’s Pharmacy Law is currently in the process of being amended. When fully enacted, it is widely expected to be a major catalyst for the country’s pharmaceutical sector, and especially for R&D-focused companies like Imexpharm. The new law will focus on shortening and simplifying administrative procedures, as well as accelerating the licensing process for drug registrations and import permits. Over the past year, new products have contributed 5% of Imexpharm’s revenue, highlighting the important role of R&D in the company’s growth strategy and just some of the potential benefits the new law could bring.
The draft amended law is also expected to encourage increased foreign investment into the pharmaceutical sector with the aim of enhancing the nation’s healthcare system overall. This is expected in turn to create more competition in the domestic market. In such an environment, high-quality production lines and modern technology applications are critical competitive advantages. Imexpharm continues to invest in R&D, which it believes will solidify its position as a leader in high-quality drug production in Vietnam.
Strong Growth and Commitment to Sustainable Value
Since the end of last year, Imexpharm’s stock price and the company’s market cap have doubled in value, outperforming both the pharmaceutical industry and the wider market. It expects the full benefits of the measures it has put in place over 2024 to be felt throughout the final quarter and well into next year. This will provide the company with a launchpad for its exciting growth plans, and will underpin its expectations for continued strong growth.
Moving into Q4, Imexpharm is confident that its performance is propelling the Company towards a final result approaching the 2024 targets set during its Shareholder Meeting at the beginning of the year. It regularly reviews its progress towards these targets as part of its internal evaluation process, and will provide any necessary updates through the rest of the year as appropriate and in line with its commitment to timely and transparent communications.
Imexpharm extends its sincere appreciation to its customers, shareholders and partners for their continued support and trust throughout its growth journey, and looks forward to the future with confidence.