Pharmaceutical stocks remain attractive in 2022 thanks to strong demand for drugs | Business

A worker using equipment in a Traphaco factory. (Photo:

Hanoi (VNS/VNA) – As the COVID-19 pandemic continues to spread nationwide and is gradually recognized as an endemic disease that can be treated at home, the demand for medicines has increased sharply.

Pharmaceutical companies should take advantage of the situation.

SSI Research expects healthcare demand to recover and grow 13% year over year in 2022.

“We estimate national health spending will return to normal levels in 2022 as social distancing measures are eased,” SSI wrote in a report for the health sector.

The impact of the pandemic will be less severe and even bring positive benefits to pharmaceutical companies, he added.

With 70% of Vietnam’s population already fully vaccinated with two doses and new coronavirus variants that could be less dangerous with lower hospitalization rates, healthcare demand in 2022 is expected to soon exceed pre-pandemic levels, hospital visits returning to normal levels. And the pharmaceutical group will derive significant additional revenue from antipyretics and vitamins used to treat mild symptoms of COVID-19.

Moreover, many VietnamThese pharmaceutical companies have received formulas for the production of COVID-19 drugs which are transferred by Pfizer and MSD, and could soon be marketed in 2022.

On February 17, Mekophar Chemical Pharmaceutical JSC (MKP) was authorized by the Ministry of Health to release the COVID-19 treatment drug Movinavir with a strength of 200mg.

The company’s main markets are in HCM City, accounting for 63%, and Hanoi (25%), with the rest being other provinces and cities.

Mekorphar is one of three companies licensed to distribute drugs to treat the disease. The other two companies are Stellapharm Joint Venture Company Limited and Boston Vietnam Pharmaceutical JSC.

According to the SSI report, the profits of companies in the healthcare sector are expected to rise sharply in 2022, with prices for medical services and medicines expected to increase slightly.

“We estimate healthcare company earnings are expected to grow 15% year-over-year, driven by 12% revenue growth and an expected 4-6% increase in drug prices and medical services,” SSI said.

“Rising prices are inevitable as pharmaceutical companies have had to deal with higher raw material prices, while hospitals have had to deal with many costly operating costs over the past two years during the last two years. COVID-19 outbreak.”

Traphaco JSC (TRA) is not a manufacturer or distributor of drugs to treat COVID-19, but attracts investors with the benefit of producing product lines to support coronavirus treatment, such as saline solution, a antibacterial mouthwash for tuberculosis and medicine to boost immunity to protect the lungs and nose. drops.

Phu Hung Securities Corporation believes that Traphaco will continue to maintain its number one position in the traditional medicine industry, focusing on investing in the development of traditional medicines as a growth impetus in the new period.

The advantage of Traphaco is the extensive nationwide distribution system and high brand awareness which will help TRA maintain the advantage of traditional drugs in the over-the-counter (OTC) channel.

Currently, the company has over 27,000 customers with 28 branches nationwide.

Therefore, pharmaceutical companies are expected to see strong growth for the whole of 2022, while the hospital group will achieve strong growth in the second half, SSI said.

“For pharma companies, we believe business results could be positive in the first half of 2022 as people stockpile drugs for the new Omicron variant of COVID-19[female[femininewhile the hospital group should wait for a recovery in the second half of this year, when Vietnam can cope with the new variant and ease travel restrictions,” the securities firm added.

In the stock market, with the prospect of positive earnings growth, SSI expects pharmaceutical company stocks to remain attractive during the pandemic period.

Le Xuan, a senior trader, said that pharmaceutical stocks are defensive stocks, as they are not affected by macroeconomic factors, but by the demand for medical examinations and treatments.

“In 2022, the potential of the industry is quite good thanks to the growing demand for health checkup and treatment,” Xuan said./.