DHG PHARMACEUTICAL JOINT STOCK COMPANY
TICKER SYMBOL: DHG
ANNUAL REPORT
2023
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ANNUAL REPORT THEME OF DHG PHARMA IN 2023
The year 2023 marks 50 years of accompanying the country's development. We are proud that we have become the leading pharmaceutical enterprise in Vietnam with a unique identity called DHG Pharma, actively contributing to community health over the past half century.
This year's theme is "EVER ASPIRING".
The message comes from the land of nine dragons, reaching out to the ocean with the desire for a more beautiful and healthier life. The message also comes with enthusiasm, resilient bravery and spirit of solidarity. All of these are aimed for the desire to improve the quality of life, enhance the reputation of the pharmaceutical industry, and to help the community access global quality products at reasonable prices.
Regardless of the past, present, or future, DHG Pharma remains steadfast in its aspirations and desires as in the early days of its start-up, constantly reaching the goal of "For a more beautiful and healthier life".
LIST OF ABBREVIATIONS
AC | Audit Committee | IMF |
ADB | Asian Development Bank | IQVIA |
AGM | Annual General Meeting | JSC |
BOD | Board of Directors | J-SOX |
BOM | Board of Management | KPI |
CAGR | Compound Annual Growth Rate | OTC |
Committee of Sponsoring | ||
COSO | Organizations of the Treadway | P/B |
Commission | ||
CPI | Consumer Price Index | P/E |
DHG Pharma | DHG Pharmaceutical Joint Stock | PBT |
Company | ||
GDP | Gross Domestic Product | PIC/s |
GDP (*) | Good Distribution Practice | R&D |
GLP | Good Laboratory Practice | RM |
GMP | Good Manufacturing Practice | ROA |
GMS | General Meeting of Shareholders | ROE |
GPP | Good Pharmacy Practice | ROS |
GSP | Good Storage Practice | SCIC |
IA | Internal Audit | UOB |
IC | Internal Control | VND |
IFRS | International Financial Reporting | WHO |
Standards | ||
International Monetary FundIQVIA Institute (formerly IMS Health and Quintiles) Joint Stock Company Sarbanes-OxleyAct - JapanKey Performance Indicator Over-the-counter drugs (Non-prescription drugs)
Price-to-Book ratio
Price-to-Earnings ratio Profit before tax
Pharmaceutical Inspection
Co-operation Scheme
Research and Development
Risk Management
Return On Assets
Return On Equity
Return On Sales
State Capital Investment
Corporation
United Overseas Bank
Vietnamese Dong
World Health Organization
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CONTENTS OF THE ANNUAL REPORT 2023
MESSAGE FROM THE CHAIRWOMAN OF THE BOARD OF DIRECTORS
CHAPTER 1: OVERVIEW
- Overview of DHG Pharma
- Financial highlights in 2019 - 2023
- Highlights in 2023
- Journey to affirm position
- Business lines and market regions
- Corporate model
- Organizational apparatus
- Board profile
CHAPTER 2: DEVELOPMENT STRATEGIES
- Macroeconomic situation
- Overview and prospects of Pharmaceutical Industry
- S.W.O.T analysis
- Development orientation for 2024 - 2030
- Business plan in 2024
CHAPTER 3: BUSINESS OPERATIONS
- Report of the Board of Directors
- Report of the Audit Committee
- Report of the Board of Management
- Analysis of the financial statements
CHAPTER 4: CORPORATE GOVERNANCE
- Share information and shareholder structure
- Report on Corporate Governance
- Evaluation of Corporate Governance Implementation
- Report on Risk Management
CHAPTER 5: SUSTAINABLE DEVELOPMENT
- Sustainable development orientation
- Stakeholders and determination of report content
- Value brought to stakeholders
- Environment
CHAPTER 6: FINANCIAL STATEMENTS
APPENDICES
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MESSAGE FROM THE CHAIRWOMAN OF THE BOARD OF DIRECTORS
Nearly half a century with stories that stand the test of time and imprint the brand identity. For DHG Pharma, these are the stories of pioneering reconstruction, persistent building and persistent commitment to spread a sustainable value chain for community health. Following the footsteps of time, DHG Pharma has constantly been creative and continuously innovated to flexibly adapt to the market. These efforts have further resonated with our strengths and breakthroughs for far reaching achievements in implementing our mission "For a more beautiful and healthier life". All DHG Pharma's employees are more than ready for the spirit "EVER ASPIRING" as our commitment to prepare for the celebration of the anniversary of the Company's 50 years of establishment, which marks an important milestone on its journey to create new, more sustainable values for the pharmaceutical industry of Vietnam. DHG Pharma's development journey encompasses its gratitude along with the meaningful support and trust of its valued shareholders, partners, employees and the trust of millions of its customers both domestically and internationally.
Dear Valued Shareholders, Partners, Customers and all employees!
The year 2023 witnesses numerous difficulties as the global economy remains unstable amid the prolonged impact of overlapping shocks and obstacles including the Covid-19 pandemic, the political conflict between Russia and Ukraine, the tightening monetary policy of developed countries as a way to curb inflation and aim for sustainable public finances and the trend of shrinking consumption and decline in export orders. However, DHG Pharma not only maintained its impressive performance but also achieved success beyond expectations. Important business targets were not only completed but also exceeded expectations. Ending the year 2023, DHG Pharma achieved its net revenue and profit after tax at VND 5,015 billion and VND 1,051 billion, respectively. Accordingly, DHG Pharma exceeds its revenue and profit targets with the growth rates of 7.3% and 6.3%, respectively.
Such impressive achievements will not be possible without the tireless efforts of the whole team. More importantly, these are the outcomes of the Company's plans for organizing production activities, material reservation as well as medium and long-term business strategies developed in a proper, specific and clear manner over the years. On such a solid foundation, every year DHG Pharma confidently proceeds with its development journey and continues to affirm the beliefs in its quality and the spirit of moving further on its new paths and journeys.
Ladies and Gentlemen!
The Vietnamese government has been showing its due interest in developing the pharmaceutical industry, aiming towards the goal of developing Vietnam to become a high-value pharmaceutical production center in the region by 2030. Viewed on a large
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scale, today's global pharmaceutical market is transparent with continuous improvements and changes in production technologies. In this scenario, the speed to engage in this global market could be seen as the ultimate weapon of competition. The opportunity is awaiting, yet there will also be many other participants; as such, only the fastest can reap the best results. More importantly, these opportunities will always be for businesses that have prepared themselves with strong potential and are ready to accelerate to reach their goals.
For nearly half a century of continuous efforts, we understand that there is no smooth road, and no success can be accomplished without hardships. To achieve today's success, generations of DHG Pharma's people have devoted day and night, united to build a pioneering DHG Pharma that has maintained its top 1 position in Vietnam. This also constantly reminds us of the importance to appreciate and preserve DHG Pharma's values with a pure heart. We will continue to place our whole faith in intelligence, responsibility and professional ethical values so that each journey we have gone through and each journey we will take on brings more sustainable values and prosperity.
In 2023 in particular and throughout its journey of nearly 50 years of development in general, DHG Pharma persistently continues its mission of health care for the community, along with the efforts to retain its leading position in production and business in the pharmaceutical industry nationwide. Love-bonding trips and meaningful community activities have contributed to the changes in the image and role of the health sector in different areas and left deep humanistic marks in the hearts of people nationwide. Beyond that, to uphold the responsibility in the country's Green economic development trend, DHG Pharma also joins its hands in the Green transformation journey with the message "Sustainable economic development is connected with environmental protection". When the Green trade becomes an inevitable trend, the first steps on the Green production journey taken by pioneering businesses today, especially those in the field of public health, will lay a solid foundation for the sustainable development in the future.
In 2024, with the commitment to continue and spread the message "Ever Aspiring", we will make stronger efforts to steer the DHG Pharma ship to reach further on its path of integration and development. Once again, on behalf of DHG Pharma, I deeply appreciate and am grateful to your kind support. We also look forward to receiving your trust and steadfast companionship in the time to come.
I wish you good health, happiness and success.
Best regards,
Chairwoman of the Board of Directors
Dang Thi Thu Ha
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CHAPTER 1: OVERVIEW OF DHG PHARMA
- Overview of DHG Pharma
- Financial highlights in 2019 - 2023
- Highlights in 2023
- Journey to affirm position
- Business lines and market regions
- Corporate model
- Organizational apparatus
- Board profile
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I. OVERVIEW OF DHG PHARMA
Vision
For a more beautiful & healthier life
Mission
"DHG Pharma always provides high-quality products and services to satisfy the aspiration for a more beautiful and healthier life."
Core values
- Our highest commitments are quality, safety, & effectiveness.
- Our foundation for development is knowledge & creativity
- Our ways of doing business are with responsibility, cooperation, & promotion.
- Our pride is DHG Pharma's cultures and identity.
- Our long-term goal is mutual prosperity with partners.
- Our competitive advantage is the superior differentiation.
- Our activities all centered around the benefits of the community.
Overview of the Company
The Company's name in Vietnamese
The Company's name in English
Abbreviation
Ticker symbol
Stock exchange
- Công ty Cổ phần Dược Hậu Giang
- DHG Pharmaceutical Joint Stock Company
- DHG Pharma
- DHG
- Ho Chi Minh Stock Exchange (HOSE)
Headquarters
:
288 Bis Nguyen Van Cu, An Hoa Ward, Ninh Kieu District, Cantho City
Owner's equity
(As at 31 Dec 2023)
Charter capital
(As at 31 Dec 2023)
Telephone
Fax
Website
Certificate of business registration and tax code
:
VND 4,852,934,674,270
:
VND 1,307,460,710,000
:
- (+84) 2923 891 433
- (+84) 2923 895 209
- dhgpharma@dhgpharma.com.vn
- www.dhgpharma.com.vn
- 1800156801
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II. FINANCIAL HIGHLIGHTS 2019 - 2023
No. | Indicators | Unit | 2019 | 2020 | 2021 | 2022 | 2023 |
1 | Income statement | ||||||
1.1 | Net sales | VND Billion | 3,897 | 3,756 | 4,003 | 4,676 | 5,015 |
1.2 | Operating profit | VND Billion | 715 | 830 | 884 | 1,112 | 1,179 |
1.3 | Other profits | VND Billion | -2 | -9 | -19 | -12 | -20 |
1.4 | Profit before tax | VND Billion | 713 | 821 | 865 | 1,100 | 1,159 |
1.5 | Profit after tax | VND Billion | 631 | 739 | 777 | 988 | 1,051 |
2 | Balance sheet | ||||||
2.1 | Total assets | VND Billion | 4,147 | 4,448 | 4,615 | 5,168 | 6,110 |
2.2 | Current assets | VND Billion | 3,134 | 3,481 | 3,721 | 4,219 | 4,642 |
2.3 | Non-currents assets | VND Billion | 1,013 | 967 | 894 | 949 | 1,468 |
2.4 | Liabilities | VND Billion | 769 | 879 | 825 | 877 | 1,258 |
2.5 | Owner's equity | VND Billion | 3,378 | 3,568 | 3,790 | 4,292 | 4,853 |
3 | Basic financial ratios | ||||||
3.1 | Solvency ratio | ||||||
3.1.1 | Current ratio | Time | 4.4 | 4.3 | 4.9 | 5.2 | 3.9 |
3.1.2 | Quick ratio | Time | 3.4 | 3.3 | 3.5 | 3.7 | 2.6 |
3.1.3 | Cash ratio | Time | 2.6 | 2.6 | 2.8 | 2.9 | 2.0 |
3.2 | Capital structure ratio | ||||||
3.2.1 | Debt/Total assets ratio | % | 18.6% | 19.8% | 17.9% | 17.0% | 20.6% |
3.2.2 | Debt/Owner's Equity ratio | % | 22.8% | 24.6% | 21.8% | 20.4% | 25.9% |
3.3 | Operation capability ratio | ||||||
3.3.1 | Total asset turnover | Turnover | 0.9 | 0.9 | 0.9 | 1.0 | 0.9 |
3.3.2 | Working capital turnover | Turnover | 1.2 | 1.1 | 1.1 | 1.2 | 1.1 |
3.3.3 | Inventory turnover | Turnover | 2.7 | 2.5 | 2.2 | 2.1 | 1.9 |
3.3.4 | Accounts payable turnover | Turnover | 16.4 | 10.4 | 9.2 | 8.6 | 9.2 |
3.3.5 | Accounts receivable turnover | Turnover | 6.9 | 8.1 | 10.3 | 13.7 | 11.3 |
3.4 | Profitability ratio | ||||||
3.4.1 | Operating profit/net sales | % | 18.3% | 22.1% | 22.1% | 23.8% | 23.5% |
3.4.2 | ROS | % | 16.2% | 19.7% | 19.4% | 21.1% | 20.9% |
3.4.3 | ROA | % | 15.1% | 17.2% | 17.2% | 20.2% | 18.6% |
3.4.4 | ROE | % | 19.4% | 21.3% | 21.1% | 24.5% | 23.0% |
4 | Shares information | ||||||
4.1 | Earnings per share (EPS) | VND/share | 4,668 | 5,443 | 5,719 | 7,318 | 7,780 |
4.2 | Dividend | VND/share | 4,000 | 4,000 | 3,500 | 3,500 | 7,500 |
4.3 | Dividend payout ratio | % | 82.8% | 70.8% | 58.9% | 46.3% | 93.3% |
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5.500 | Capital structure | ||||||||||||||
4.500 | (Unit: VND billion) | 4.853 | |||||||||||||
3.500 | |||||||||||||||
3.568 | 3.790 | 4.292 | |||||||||||||
2.500 | 3.378 | ||||||||||||||
1.500 | |||||||||||||||
500 | 1.258 | ||||||||||||||
769 | 879 | 825 | 877 | ||||||||||||
-500 | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||
Liabilities | Owner's equity | ||||||||||||||
EPS and dividend
(Unit: VND/share)
7.318 | 7.780 | |
7.500 | 7.500 | |
5.4435.719
5.000 4.668
2.500
0
4.0004.000
3.5003.500
2019 | 2020 | 2021 | 2022 | 2023 |
EPS | Dividend |
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- HIGHLIGHTS IN 2023
- Maintaining the leading position in Vietnam Pharmaceutical Industry for 27 consecutive years, Top 5 pharmaceutical enterprises with the largest market share in Vietnam Pharmaceutical Industry with VND 5,015 billion in net sales, VND 1,159 billion in profit before tax, and VND 1,051 billion in profit after tax. DHG witnessed a good growth in a context of global and domestic economic challenges.
- Products with international quality standards and reasonable prices are increasingly receiving the trust of a large number of consumers, customers and the medical community, contributing to enhancing the DHG Pharma brand. Featured brands are Hapacol, Klamentin, Apitim, Zaromax, NattoEnzym, Naturenz, Bipp, etc.
- Strengthening cooperation with large pharmacy chains such as Long Chau, Pharmacity, An Khang, Trung Son, etc. to optimize the distribution network and improve product accessibility for consumers.
- The Company completed the construction of the Betalactam factory, upgraded almost the entire production line at the Non-Betalactam factory to global GMP standards along with investments in advanced machinery and equipment with high capacity. All of these contribute to modernize production processes, to meet market needs and to improve competitiveness.
- Improving governance structure through applying best corporate governance principles, enhancing transparency and accountability; Integrating information technology into management and developing corporate culture has improved operational efficiency and built trust with investors and customers.
- New progress in using solar energy at the pharmaceutical factory in Hau Giang, opening a new phase in the use of green and sustainable energy.
- DHG Pharma is a unit that makes a positive contribution to the government budget and promotes the development of the community and the society.
- Distinguished awards in 2023
- 11 consecutive years - Top 50 Best Listed Companies voted by Forbes Vietnam
- 08 consecutive years - Top 10 Prestigious Pharmaceutical Companies voted by Vietnam Report
- 12 consecutive years - Top 50 Vietnam's Best Performing Companies organized and voted by Vietnam Investment Review Magazine
- 27 consecutive years - Vietnamese High-quality Goods voted by consumers
- 06 consecutive years - Best Corporate Governance Report (Midcap group in 2020, 2021, 2022 and 2023)
- Top 100 sustainable enterprises in Vietnam voted by Vietnam Chamber of Commerce and Industry (VCCI)
- Top 100 best places to work in Vietnam
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