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Pharmaceutical stocks are drawing renewed investor attention after many companies reported positive first-quarter 2026 results, highlighting the sector’s defensive characteristics amid market volatility near record highs.
A review of the financial statements of 33 pharmaceutical firms found that 23 companies recorded profit growth in Q1, with many sustaining double-digit increases.
This year’s profit performance is not being driven solely by revenue growth. Companies are also benefiting from cost optimization, product restructuring, and expanding hospital distribution channels (ETC), helping sustain earnings even where market demand has not yet strengthened significantly.
DHG reported net profit after tax of over 315 billion VND, up nearly 19% year-on-year, while revenue rose only modestly. Profit margins improved due to lower cost of goods and a significant reduction in selling expenses.
DHG’s strategy is described as prudent yet effective, supported by large cash reserves, a high dividend payout, and limited debt pressure—factors that contribute to its reputation as a defensive staple stock.
Imexpharm’s Q1 2026 net profit was around 82 billion VND, up 10% year-on-year. The improvement was mainly attributed to sharply lower selling and administrative costs.
The company is also pushing the ETC channel, which is expected to benefit from the trend toward domestically produced hospital medicines. Capacity expansion at EU-GMP compliant plants is cited as strengthening competitiveness versus peers.
Traphaco posted net profit of 62 billion VND, up 48% year-on-year, on revenue of 633 billion VND (up 14%). While revenue growth was not described as strong, the company adjusted its product mix toward higher-margin items.
Tight control of selling costs relative to revenue also improved operating efficiency.
DVN’s net profit nearly doubled year-on-year to 146 billion VND. However, the growth was not driven by core operations, as revenue and cost of goods sold were flat. Instead, it was mainly supported by 83 billion VND in profit from associates and tighter administrative costs.
In distribution and retail, FPT Retail’s Long Châu pharmacy chain continues to lead by scale. EBITDA for the pharmaceutical segment reached about 637 billion VND in Q1, up 55% year-on-year.
Long Châu has expanded to over 2,500 stores nationwide, indicating room for further growth in pharmaceutical retail.
Several mid-sized and small-cap companies reported sharp profit increases. Tipharco (DTG) recorded net profit 17 times the year-ago period, reaching 6 billion VND, helped by a shift to high-margin products and debt reduction.
Ben Tre Pharmaceuticals (DBT) and Danapha (DAN) reported profit increases of 6x and 2x, respectively—15 billion VND for DBT and 34 billion VND for DAN—driven by higher financial income.
Cash flow trends are beginning to diverge across the pharma group. While results are generally positive, stock price movements show dispersion, with capital flows currently concentrated on leading firms that have solid finances, good liquidity, and clearer growth narratives.
Since the start of the year, DBD (Bidiphar) shares have risen about 11%, while IMP and DHG have fluctuated around 2–3%. The pattern suggests investors are favoring companies with faster earnings growth rather than purely defensive profiles.
Analysts say the sector still has a structural advantage as the broader market faces profit-taking after a prolonged rally. Compared with cyclical sectors such as real estate, pharma stocks are viewed as offering more stable earnings because healthcare demand is less sensitive to economic fluctuations.
Long-term support is also linked to aging populations, rising health expenditure per capita, and policies supporting domestic pharmaceutical development—factors that help underpin long-term growth and make pharma stocks attractive to long-term funds.
Risks remain, however. The group’s valuation is described as less attractive after years when pharma was treated as a “safe haven,” and low liquidity can limit many pharma stocks’ ability to build strong short-term momentum.
Overall, the sector’s outlook could remain positive if companies sustain earnings growth in coming quarters, though dispersion is expected to widen as capital concentrates on firms with high-quality production, tight cost controls, and strong distribution networks to expand market share.
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