Vietnam’s Vinapharm & 7 other pharma cos plan IPOs this year

Vinapharm's retail product (image from company website)

In Vietnam, eight state-owned pharma companies are expected to go public this year. Vinapharm – which is expected to have a strong investor response- along with Central Pharmacy 1, Central Pharmacy 2, Vietnam Medical Equipment and DK Pharma (established by the Hanoi University of Pharmacy) are slated for their initial public offerings (IPO) in the second quarter.

The other three will offer first shares by year-end.

The development has come after the Vietnamese Ministry of Health ‘urged’ the eight pharma companies, under its management, to “hasten the process of equitisation”

The ministry, which had about 35 companies under its wings, saw a bulk of the companies(25), auction their shares in 2007.

Since then, only one pharmaceutical firm was privatised, last year. Foripharm Central Pharma No 3 began selling shares to the public in December 2014 and has filed to list on the Hanoi Stock Exchange.The northern Hai Duong based-company has maintained annual sales beyond VND150 billion ($7 million) in recent years, with profit increasing averagely 30 per cent per annum.

The delay in the process of equitisation for the rest of the firms, was attributed to the prolonged procedures for evaluating corporate value of the corporations and companies, the ministry said.

Also read: Vietnam to launch 292 state co IPOs in 2015

After a year with only one IPO movement, the ministry is now seeking ways to attract investors, as most of the enterprises up for privatisation, are much smaller than their other counterparts.

The only exception being Vinapharm Corporation, which has a registered capital of VND1.34 trillion ($62.9 million). In 2014, its revenue rose 5 per cent to reach VND32.9 trillion ($1.54 billion). Apart from production of pharmaceutical products, the company is also involved in the businesses of exports and financial investments; it also possesses a wide network of international distributors.

Meanwhile, the one company that will refrain from listing is Medical Publishing House, which is 100 per cent state-owned.

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