Company report DBD - Nhon Hoi factory achieving EU-GMP will raise DBD to a new level
JSC is one of the few leading domestic companies in the production of anti-cancer drugs and dialysis solutions. DBD’s Nhon Hoi anti-cancer factory is expected to be approved EU – GMP standards for injection and tablet lines in June 2023 and March 2024. This not only helps DBD become the first anti-cancer drug company in Vietnam to own a line that meets EU – GMP standards, but also improves the company's capacity to bid for ETC channels in tiers 1&2 for anti-cancer drug product groups, where the selling price is many times higher than for drugs with the same active ingredients in tiers 4&5. Currently, the kidney market in Vietnam has little competition. DBD with its lines of hemodialysis and peritoneal dialysis solutions currently dominates tiers 4&5. We expect the two groups of products to have many competitive advantages. Anti-cancer drugs and dialysis solutions will be the driving force for revenue growth on the ETC channel. The ETC channel revenue in 2022F and 2023F is forecasted to reach VND 721 billion (+16%YoY) and VND 890 billion(+23% YoY), respectively.
For the OTC channel, we expect the company to strengthen the distribution system for pharmacies. The number of pharmacies selling DBD products has increased from about 15,000 in 2021 to 17,500 in 6T2022. This figure can be raised to 18,7500 by the end of 2022 and is expected to reach 30,000 by 2025. We expect the OTC channel revenue in 2022 and 2023 to reach VND 532 billion (+19% YoY) and VND 606 billion (+14% YoY), respectively.
Therefore, we expect net revenue/NPAT for 2022 to reach VND 1,469 billion (-5.7%)/VND 215 billion (+16.8% YoY). For 2023, net revenue/NPAT reach VND 1,697 billion (+15.5% YoY)/VND 264 billion (+22.9% YoY). We forecast that NPAT will be at a CAGR of 23% for 2022F – 2026F.
Using the FCFF cash flow discount method (50%) and the target P/E factor of 20x (50%), we arrive at a target price of 52.200 VND/share, equivalent to an expected return of +35%, based on the closing price on October 25th, 2022. We recommend to BUY the stock.
Binh Dinh Pharmaceutical and Medical Equipment Joint Stock Company (Bidiphar) is a Vietnam-based company primarily engaged in pharmaceuticals sector. The Company's leading business activities are the production and wholesale of medicines, including antibiotics, antipyretics, pain relievers, cardiovascular drugs, antifungal and antiviral drugs, respiratory drugs, vitamins and functional food, among others. Bidiphar is also involved in the manufacture and distribution of medical equipment, supplies and packaging.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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