Traphaco Joint Stock Company

Traphaco is a pharmaceutical company which specializes in the development, marketing and distribution of Vietnamese traditional medicines. Traphaco produces and sells more than 230 products focusing on: central nervous system, digestive, cardiovascular, analgesics, respiratory and ontological system, eye care, etc. They have nationwide distribution channels through which they products are sold. The company operates a GMP-compliant factory in Hanoi and is a shareholder of another GMP-compliant factory in Hung Yen Province. Traphaco’s factories use high-tech pharmaceutical equipment imported mostly from Germany and Korea.   Traditional Medicines Traditional medicines play a key role in Traphaco’s business strategy. The company is now focusing its substantial resources to develop this product line by taking advantage of the variety of special herbal species in Vietnam. Key medicines in this product line are Hoat huyet duong nao, Boganic, Luc vi am, Alaska, Ampelop, Ha thu o, Vien sang mat, Sitar, Ich mau, Thap toan dai bo. Revenue from these products accounts for the majority of total revenue from traditional medicines.

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Western Medicines

Traphaco have a wide range of Western medicines with more than 100 products that are licensed to put into circulation. The key medicines in this product line are Amovita, Antot-Philatop, Avircream, Dibetalic, Levigatus, T-B Mouthwash, Trafedin, Tramorin, Trapha. Most of these medicines product are sold OTC. Revenue from these products occupies the majority of total revenue from western medicines.

Investment Thesis

Sustainably net profit growth primarily driven by expanding market presence, especially in the Southern market, and widening the distribution network. At the same time, we expect a rerating of the P/E given the company’s expanded distribution network and improved corporate governance following the acquisition of partially-owned subsidiaries.

History of the Company

1972: Traphaco joint venture was formally the Pharmaceutical workshop of Railway Hospital – a subsidiary of Ministry of Transportation. It was established on 28 November to produce some basic pharmaceutical products for the hospital.

1993: The workshop was upgraded to a pharmaceutical factory under the name of Railways pharmaceutical factory (Raphaco). It then had about 100 employees.

1994: The company was officially renamed to Traphaco with additional functions of improving its pharmacies and drug stores in Hanoi and building distribution network in the North of Vietnam.

1998: The first factory of Traphaco was built and operated in Phu Thuong - Hanoi and it obtained the General Manufacture Practice – ASEAN (GMP-Asian) accreditation from Vietnam Drug Administration Department. It was the first pharmaceutical factory that had such professional compliance of GMP in the North of Vietnam and one of the sevens in the country.

2000: The company was equitized and officially named Traphaco Pharmaceuticals and Equipment Joint Stock Company.

2001: The company was renamed to Traphaco Joint Stock Company.

2004: The construction of Hoang Liet factory was completed. Traphaco moved its factory from Phu Thuong to Hoang Liet. Hoang Liet factory was built in 9,000m2 area (with 50 years leasing time) and was accredited GMP/GSP/GLP – Asean. (GSP means General Storage Practice, GLP means General Laboratory Practice).

2007: Traphaco’s factory is accredited to GMP-WHO standards in Jan-2007.

2008: Traphaco is listed on the Ho Chi Minh Stock Exchange 

More information on Traphaco is available on their website www.traphaco.com.vn.