IMP Update – OUTPERFORM

IMEXPHARM CORP (IMP VN)

The hospital channel sustained its upward trajectory and the pharmacy channel also witnessed substantial improvements. We maintain our projections of 15.0% YoY and 17.6% YoY growth in net revenue and EAT, respectively, for IMP in 2025. Moving target price to YE2026 at VND59,800/share. Rating OUTPERFORM.

A robust first half. Net revenue achieved VND1,227bn (+21.7% YoY) and EAT was VND165bn (+29% YoY) in 1H2025. Sales from in-house production captured almost 100% of its net revenue.

Both the hospital and pharmacy channels delivered strong upturns (+24% and +32% YoY, respectively, in gross sales; net growth was not disclosed), with value outperforming volume growth. The government’s priority for local drugs combined with the company’s advantages of advanced production standards and increased focus on high-value products have underpinned the hospital channel’s momentum.

Meanwhile, the pharmacy channel was driven by vigorous growth in its traditional pharmacies and retails chains, as a result of the base effect in the same period last year and its strategic pivot to boost sales through retail customers in the channel. The spread of respiratory diseases early this year might have provided an additional support.

The EAT leaped on a widened gross margin explained by a well-managed materials sourcing and production plans, slight increase in material prices, preference for high-margin products and impacts on depreciation due to integrating IMP4 normalizing.

The new EU-GMP factory (IMP5) is expected to start construction in 4Q2025 and go into operation in Dec 2028 – 1Q2030. The company settled the land lease payment and received the land in March 2025. The factory aims to diversify the company’s product mix; nevertheless, antibiotics is still aimed as the mainstream category, currently capturing 75% of IMP’s sales.

The slowdown in July net revenue and EBT growth (+13% YoY and 9% YoY, respectively; EAT was unavailable) was attributed to customers stockpiling in June before selling price increases from IMP and changes in the government’s tax policies for household businesses. The hospital channel upheld solid growth of 27% YoY, whereas the pharmacy channel’s revenue dropped by 19% YoY in the month.

Outlook: We project that the company may generate VND2,536bn of net revenue (+15.0% YoY) and EAT of VND377bn (+17.6% YoY) in 2025, including slower growth in 2H – versus 1H – given the slowdown in July – August.