Templeton Frontier Markets Fund cuts ownership rate in DHG

Despite a slowdown dating from the second half of 2016, the pace of the merger-and-acquisition market is expected to pick up in the months to come with many potential deals ahead. Bich Thuy reports. Banking will continue to be among the sectors most appealing to foreign investors for M&A, Photo: Le Toan The Japan-invested Daiwa-SSI Fund is on the way to acquire a 20 per cent stake in Hanoi-based CVI Cosmetic & Pharmaceutical Co. for an undisclosed sum. “We are working on necessary procedures to complete the acquisition by the end of July. The Japanese investment will enable us to develop a factory in the Hoa Lac Hi-Tech Park,” Phan Van Hieu, chairman of CVI, told VIR. Daiwa-SSI’s bid is among the new potential deals for the second half of 2017, while many others are being negotiated. At last week’s press conference on the M&A Vietnam Forum 2017 organised by Vietnam Investment Review and AVM Vietnam, experts said  pharma and healthcare will be among sectors that hold the biggest appeal for mergers and acquisitions (M&A) in 2017 and 2018, driven by the increasing population and growing middle class. “Increasingly deep global integration, through the signing of free trade agreements and the establishment of the ASEAN Economic Community, has contributed to making Vietnam more attractive to international groups and M&A is an effective investment channel,” said Tran Thanh Tam, director of KPMG’s Markets Group. …... [read more]

Vietnam’s pharmaceutical industry is emerging as one of the most attractive prizes for foreign investors as Vietnam’s stock market opens up more to attract foreign investment, but concerns over liquidity and corporate governance remain, according to an article from Bloomberg on August 11. By way of example it mentioned the Domesco Medical Import-Export JSC, the third-largest listed pharmaceutical producer, whose share value has increased 149 per cent this year after shareholders approved the removal of the 49 per cent foreign ownership ceiling. The share value of DHG Pharmaceutical JSC, the largest producer in the country, has risen 44 per cent, with Japan’s Taisho Pharmaceuticals Holdings Co. buying a 24.5 per cent stake last month. “Vietnamese healthcare companies returned 46 per cent in 2016, the best performance among ten industry groups on the VN-Index,” Bloomberg wrote. “If Domesco secures approval to remove its foreign cap it would be catalyst for the market in general and for the share in particular,” Mr. Tran Hoang Son, Head of Market Strategy at MB Securities JSC, told Bloomberg. “The pharmaceutical industry is already an attractive sector for overseas investors.” Vietnam’s pharmaceutical market is forecast to increase from $4.2 billion in 2015 to $7.2 billion by 2020 and then maintain double-digit annual growth to 2025, according to a report from BMI Research. The industry will continue growing at around 10 to 15 per cent a year, said Mr. Chris Freund, founder of Mekong Capital. “Vietnam’s pharmaceutical sector is still very fragmented and the management standards are…... [read more]

As Vietnam opens up to more foreign money, the country’s fast-growing pharmaceutical industry is emerging as one of the most attractive prizes for overseas investors. Domesco Medical Import-Export JSC, the third-biggest listed drugmaker, has shot up 149 percent this year as it got shareholder approval to scrap the 49 percent foreign ownership limit on its stock. DHG Pharmaceutical JSC, the largest, has risen 44 percent, with Japan’s Taisho Pharmaceuticals Holdings Co. buying a 24.5 percent stake last month. Vietnamese health-care companies have returned 46 percent in 2016, the best performance among 10 industry groups on the VN Index. The government cleared Vietnam Dairy Product JSC, the biggest listed company, to scrap its foreign investment cap in July, driving the VN Index to an eight-year high amid optimism further approvals would follow. Overseas ownership of many local drugmakers is already at or near the limit, creating pent-up demand from money managers seeking to benefit as the nation’s burgeoning middle class spends more on health-care. “If Domesco gets approval to remove the foreign cap, it will be a good catalyst for the market in general and for the stock in particular,” said Tran Hoang Son, the Hanoi-based head of market strategy at MB Securities JSC. “The pharmaceutical industry is already an attractive sector for overseas investors.” Vietnam’s pharmaceutical market is forecast to increase from $4.2 billion in 2015 to $7.2 billion by 2020 and then maintain double-digit annual growth through 2025, according to a report by BMI Research. The industry will keep…... [read more]

Tasco, one of Vietnam’s biggest private transport infrastructure developers in Vietnam, is working on plan to co-operate with some state-run hospitals to develop their satellite hospitals. This will ease existing hospital overloads. ‘We have studied medical development models in other countries, and we want to co-operate with partners from Singapore, Japan, France, Colombia, and the US who have strong financial capacity and years-long experience in the medical sector’, Tasco’s chairman Pham Quang Dung told VIR. However, he admitted that Tasco’s plan was encountering some challenges. Under several current rules, when a private firm invests in public hospitals, it is not allowed to own land where the hospitals are located. This means that private firms cannot use that land for collateral to get bank loans. Tasco is an example of the growing trend among private firms to penetrate lucrative and sensitive sectors like the healthcare sector to gain potential untapped profits. Vietnamese nationals spend billions of dollars on medical care abroad a year. In 2016, Vietnam has witnessed a bustling year of foreign capital flows in the medical market. In early July of this year, Japan’s Taisho Pharmaceutical Holdings completed acquisition of a 24.5 stake in Vietnam’s biggest publicly traded drug maker Hau Giang Pharmaceutical JSC from 34 foreign investors. In late June, Malaysia’s Navis Capital partners completed a partnership deal with Hanoi French Hospital (HFH) at an undisclosed value. HFH operates a 70-bed hospital in Hanoi. Adding more to the list is VinaCapital Vietnam Opportunity Fund (VOF), who announced just…... [read more]

Fruit, vegetable export value up in H1 Vietnam gained a 33 percent year-on-year increase in the fruit and vegetable export value to reach 1.17 billion USD for the first half of 2016, officials said. This was mainly due to higher demand in China’s market, said the Vietnam Fruit and Vegetables Association. According to the General Department of Customs, China was the largest export market for Vietnam’s fruit and vegetables, accounting for 70 percent of the national export volume of these products in the first five months of the year. The total export value of local fruit and vegetable products reached year-on-year growth of 80 percent, touching 692 million USD in the first five months, the department said. The United States was the largest export market for local fruit, with a year-on-year increase in export value of 62 percent to reach 37 million USD. The Republic of Korea was the third-largest export market, with year-on-year growth of 25.7 percent to reach 35.4 million USD. In the first half of this year, Vietnam exported 4,608 tonnes of fresh fruit to fiercely competitive markets such as the United States, Japan, the Republic of Korea, New Zealand and Australia, of which 72 percent was dragon fruit. In the future, dragon fruit exports are expected to increase even further because such exports from Vietnam to Taiwan will recover after the latter’s block on fruit imports is lifted. Taiwan plans to import 14,000-16,000 tonnes of dragon fruit per year. Vietnam expects to make 2 billion USD…... [read more]

Japanese Taisho Pharmaceutical Co., Ltd. (Taisho) spent $100 million on buying a 24.4 per cent stake owned by 34 foreign shareholders in Hau Giang Pharmaceutical JSC (DHG), according to information published by Vietnam Securities Depository (VSD). After the sale, Taisho became the second largest shareholder in DHG, following State Capital Investment Corporation (SCIC), which owns 43.3 per cent. Some large foreign enterprises divesting DHG are Vinacapital, Dragon Capital, Fullerton, Nikko New Age Asia Equity, and Mekong Portfolio Investment Limited, among others. Taisho Vietnam Co., Ltd., which is a subsidiary of Taisho Pharmaceutical Holdings Co., Ltd., set up with the initial investment capital of $18 million. The company specialises in manufacturing beverages, such as its key product Lipovitan Honey energy drink. Vietnam’s biggest publicly-traded drug maker, DHG specialises in manufacturing and trading pharmaceuticals, functional food products, and cosmetics. As of 2015, DHG ranked among the top five largest domestic drug makers in Vietnam. DHG’s products made up 5 per cent of the Vietnamese pharmaceutical industry and accounted for 11 per cent of domestic enterprises’ market share. As of the first quarter of 2016, the company has an asset of over VND3.4 trillion ($152.4 million) and a net revenue of VND815 billion ($36.5 million) in the first three months of 2016. This year, the company plans to reach VND679 billion ($30.4 million) in profit, up 14 per cent on-year. The Vietnamese pharmaceutical market has become attractive in foreign investors’ eyes, thanks to a dynamically growing population of more than 90 million and…... [read more]

Japanese-owned Taisho Pharmaceutical Holdings has reportedly acquired a stake of 24.4 percent in Vietnam's biggest drug distributor DHG Pharma in a deal estimated at nearly VND2.2 trillion (US$97.2 million). The stake, equivalent to more than 21.3 million shares, were bought from 34 foreign shareholders, local media reported on Monday, citing the Vietnam Securities Depository. Taisho is now the largest foreign shareholder. The transfer took effect on June 30, when DHG's stock was traded at VND103,000 per share. Currently, foreign investors own a combined stake of 49 percent in DHG, while the government controls 43.3 percent. DHG, which has stakes in 38 companies, reported a net profit of over VND594.4 billion ($26.26 million) last year, up 11.36 percent from 2014.... [read more]

Japanese pharma invests nearly $100 million in Vietnamese medicine maker By Dam Tuan &nbspJuly 5, 2016 | 02:47 pm GMT+7 Tokyo based medicine giant Taisho has acquired a 24.4 percent stake in DHG. Foreign shareholders in DHG Pharmaceutical JSC have sold their combined stake worth over $98 million to Japan's Taisho Pharmaceutical, making it the second largest shareholder in DHG with a 24.4 percent interest. On June 30, Taisho purchased over 21 million shares from 34 foreign shareholders at VND103,000 ($4.63) per share, according to the Vietnam Securities Depository. Taisho has acquired 24.4 percent of Vietnam's DHG Pharmaceutical worth nearly $100 million. Photo from sggp.org.vn Vietnam’s sovereign wealth fund the State Capital Investment Corporation (SCIC) is the major shareholder with a 43.3 percent stake. Most of the foreign shareholders that have cashed out are linked to VinaCapital, Dragon Capital and other foreign funds including Nikko New Age Asia Equity, Norges Bank, Fullerton VPIC Fund and Portal Global Limited. The deal comes a month after DHG decided to pay a cash dividend of 35 percent. Taisho Pharmaceutical Co., Ltd., under Taisho Pharmaceutical Holdings in Japan, has total assets of JPY759 billion (about $7.1 billion). The drug manufacturer reported revenue of JPY290 billion ($2.8 billion) and the holding company reached post-tax profit of JPY22.47 billion ($219 million) in 2015. In Vietnam, it established the Taisho Vietnam factory in 1999 from where it distributes the energy drink Lipovitan. Related news: > Vietnam Pharmaceutical Corporation to go public in June Follow us on Facebook…... [read more]

Former Deputy Minister of Health Doctor Le Van Truyen spoke with the Lao Dong (Labour) newspaper about why Vietnamese people are still hesitant to use domestically produced pharmaceuticals. * Vietnamese people still don't want to use local drugs. Is it because local drugs lack quality? The habit of preferring imported drugs over local ones by doctors and patients is due to many reasons, one of which is that it is a consumption habit of the Vietnamese. Many local dug producers aren't transparent enough or provide enough evidence about the effects of their drugs compared with imported drugs. This is in spite of the significant milestones achieved by the country's medical and pharmaceutical industry. This has deepened people's doubts on the effectiveness and reliability of local drugs. I think treatment effects are a bigger factor informing the beliefs of doctors and patients rather than colourful branding and advertisements on mass media. * Why does Vietnam still import specific drugs when some of the patents protecting these drugs have expired and these drugs could be made locally? Most specific drugs used in specialised and central hospitals are drugs invented by multi-national pharmaceutical companies and still protected by patents - generally 20 years. It would be prolonged to 25-30 years in bilateral and multilateral free trade agreements between developed and developing countries. This prevents the local pharmaceutical industry from producing these specific drugs. However, local drug producers should develop plans for the early research and exploitation of drugs with patent protections so that…... [read more]

Former Deputy Minister of Health Doctor Le Van Truyen, spoke with the Lao Dong (Labour) newspaper about why Vietnamese people are still hesitant to use domestically produced pharmaceuticals. Vietnamese people still don't want to use local drugs. Is it because local drugs lack quality? The habit of preferring imported drugs over local ones by doctors and patients is due to many reasons, one of which is that it is a consumption habit of the Vietnamese. Many local dug producers aren't transparent enough or provide enough evidence about the effects of their drugs compared with imported drugs. This is in spite of the significant milestones achieved by the country's medical and pharmaceutical industry. This has deepened people's doubts on the effectiveness and reliability of local drugs. I think treatment effects is a bigger factor informing the beliefs of doctors and patients rather than colourful branding and advertisements on mass media. Why does Viet Nam still import specific drugs when some of the patents protecting these drugs have expired and these drugs could be made locally? Most specific drugs used in specialised and central hospitals are drugs invented by multi-national pharmaceutical companies and still protected by patents - generally 20 years. It would be prolonged to 25-30 years in bilateral and multilateral free trade agreements between developed and developing countries. This prevents the local pharmaceutical industry from producing these specific drugs. However, local drug producers should develop plans for the early research and exploitation of drugs with patent protections so that they…... [read more]




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