Press Release

Traphaco Joint Stock Company’s General Meeting of Shareholders 2019 sets a target of consolidated revenue of VND2.16 trillion ($93.91 million) with after tax profit of VND205 billion ($8.9 million).

On March 28, 2019, Traphaco JSC (code: TRA) successfully organised the annual general meeting of shareholders (AGM). The meeting approved the business plan for 2019 with consolidated revenue target reached VND2.16 trillion ($93.91 million), up 15 per cent and consolidated profit after tax reached VND205 billion ($8.9 million), an increase of 30 per cent compared to 2018.

2018 was such pressure year for Traphaco in the context of volatile business environment and fierce competition from pharmaceutical companies.

According to the consolidated financial statements approved at the meeting, Traphaco's consolidated revenue reached VND1.788 trillion ($77.74 million), achieving 75 per cent of the plan for 2018 (down 4 per cent compared to 2017). Profit after tax of the parent company reached VND156.27 billion ($6.79 million - down 35 per cent compared to 2017).

In 2018, the average income of Traphaco employees reached VND20.38 million ($886) per month, down 6.8 per cent compared to 2017, but still reached a good level compared to the market average. Traphaco has paid a 20 per cent dividend advance to shareholders in January 2019.

In 2018, Traphaco posted encouraging achievements in brand, customers, new products, quality management, and employees, creating important premises for long-term development. The company also boldly invested in research and development as signing bio-equivalence research contracts and cooperated with Hanoi University of Pharmacy. In addition, in March 2019, TRA officially launched the technology transfer project with partner Daewoong, South Korea.

Traphaco's AGM approved the consolidated revenue plan of VND2.16 trillion ($93.91 million), increasing by 15 per cent with the consolidated profit after tax of VND205 billion ($8.9 million), up 30 per cent compared to 2018.

To achieve the goal for 2019, the company will focus on five key points including developing Ethical drugs (ETC) market (bidding channel at the health department and hospital); innovating marketing activities; increasing cost control; assign key performance indicator(KPI) to each department and individual according to the general strategy; and improve the ability to exploit new plants.

Mr. Tran Tuc Ma, General Director of Traphaco said, “Traphaco chooses2019 as a year to focus on improving corporate governance in order to resonate resources and promote maximum capacity of employees in enterprises. Traphaco will assign the task in accordance with the 2017-2020 strategy throughout the company, regularly supervising and supporting employees to seize the targets and take initiative in implementing the plan”.

At the shareholders' meeting, representatives of major shareholders of Traphaco shared and committed to accompany in the sustainable development strategy of the business.

Mr. Nguyen Anh Tuan, Vice Chairman of Traphaco, representing of State Capital Investment Corporation (SCIC),the major shareholder, said: “In 2018, there was fierce competition in the pharmaceutical industry. The market waited for the Ministry of Health's circular on drug bidding. However, through many times of revising the draft, the Circular has yet been issued. The bidding channel at the health department and hospital according to evaluation accounts for 65 per cent or market share. The pharmaceutical industry in 2018 reached a scale of nearly $4 billion, we are a big pharmaceutical company that also has a deep penetration into ETC”.

“The new mechanism will help to compete more equitably on quality.The current competition focuses on price which Traphaco has yet had favorable conditions because the company invests strongly in production, in order to have high quality medicines. Therefore, Traphaco’s price is higher. The new bidding mechanism will help compete in price and quality, helping patients to access good quality products. Traphaco is interested in ETC channel. The company has signed technology transfer contract with major South Korean shareholder, besides we also look for other partners and at the same time carry out franchise production. Board of Directors (BoD) and shareholders strongly committed to support Traphaco, at least until 2021, will have a roadmap and focus on ETC channel growth ”, said Nguyen Anh Tuan.

Mr. Lee ChoongHwan, representative of MAGBI Fund said, “Competition in the pharmaceutical industry is increasingly fierce with the penetration of many foreign pharmaceutical companies into Vietnam, and products standards are stricter.

However, Vietnam is a developing country and spending on pharmaceutical will certainly increase. This has been witnessed in Japan, China, and South Korea. Therefore, in that developing process, companiesthat overcome challenging time will grow stronger”.

The three solutions which have been discussed and agreed by major shareholders and Traphaco's BoD for long-term implementation including improving efficiency as well as operation of the executive board, expand networks, and optimise expenses; diversification the products and income sources; technology and scientific content. Traphaco not only leads in production but also the increasing application of scientific progress.

To deal with difficulties, we are willing to corporate with shareholders to build a plan to diversify products and activities to earn new income streams. Daewoong, another South Korean strategicpartnerto Traphaco, will transfer the technology to develop strategic products on Hung Yen. In the next coming years, going a step further beside technology transfer, we also deliver the management expertise.

MAGBI has a large shareholder network andis paying attention to many companies in Vietnam market. Together with the major shareholder, MAGBI will coordinate with Traphaco to boost production. “We believe that by 2021, Traphaco continues to be the leader in Vietnamese OTC market, maintaining its position as a fast-growing company in the market. We also expect at least 20 per cent of revenue will come from Traphaco's new products. Traphaco will have higher profit growth rate than revenue, and much higher than the industry average. To achieve this desire, the shareholders needto work closely.MAGBI commits to long-term investment in Vietnam, we already have 3,000 employees in Vitnam and will keep investing to Vietnam.. We believe that Vietnam is a greatcountry and Traphaco is a great company with great people”, said MAGBI representative.

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For more information, please contact:

Ms. Dao Thuy Ha, Marketing Director, Traphaco JSC:

Head office: 75 Yen Ninh Street, Ba Dinh District, Hanoi, Vietnam

Transaction address: Lane 15, Ngoc Hoi Street, Hoang Liet Ward, Hoang Mai District, Hanoi

Phone: 18006612 / Email: info@traphaco.com.vn