Market increased in almost industries with high liquidity, IMP - A stock each day


- Vn-Index increased higher and higher during the day to close at highest point.
- However, there is no signal of buying too fast during the day.
- Cash flow more focuses on banking and oil&gas sectors.
- Liquidity increased significantly: 44% higher than 20-day average, and 23% higher than last trading day.
- Foreigners net buy in 7 consecutive days, mostly on VNM (86 bill).


- Trade war is stopped for 90 days for further detailed negotiation and discussion between US and China - result after meeting between two presidents in G20: US will not increase tax from 10% to 25% since 1/1/2019, and China agreed to buy much more agriculture value from US and discussion more on other complicated issues such as technology transfer, intellectual protection...
- Most global stock markets and commodities markets increased sharply due to stopped trade war.
- Quatar announces to exit OPEC since 1/1/2019 right before OPEC oil cut meeting. It can show signal that this country will not cut oil production and other OPEC agreements in the future.

- VCB and VIB are first 2 banks recognized by State Bank as meeting Basel II standard.
- PMI Vietnam in Nov reached 56.5 point, highest since Feb/2016.
- USD/VND central rate ỉncreased by 5 to 22,755 - highest in 2018.


Business model:
- IMP is a large pharmaceutical company with 100% revenue from medicines and pharmaceuticals. Moreover, IMP is one of few Vietnamese pharmaceutical companies focusing on high quality products.
- IMP owns 4 plants: 2 plants meet EU-GMP standard and 2 meet WHO-GMP standard (EU-GMP is higher standard than WHO-GMP and meet distribution requirement to hospitals). Among 4 plants, only 1 is producing at 100% capacity, while the other 3 have relatively low operating capacity of 30-70%.
-  IMP’s 2 major product lines are antibiotics, and analgesics or antipyretic, accounting for 96% total sales. 
- IMP's main distribution channel is OTC (selling through agents, private pharmacies, hospital pharmacies, self-distribution companies, supermarkets, retail stores ...). However, proportion of ETC channel (distribution to hospitals) has increased from 2015 to 18.3% in 2017. Distribution area is mainly in the South (Mekong Delta, HCMC and South East) with ~ 74% of sales.

Investment catalysts:
- Industry volume growth ~8.5%/year as 1) pharmaceutical industry is defensive and less affected by business cycle, and 2) drug consumption per capita in VN  remains very low compared with other countries.
- New pharmaceutical law: hospitals don’t offer bid orders to imported drugs when domestically produced medicines meet requirements of treatment, price and volume. IMP is one of few pharmaceutical companies meeting EU-GMP standard for distributing to ETC channel. Investment for EU-GMP standard plant takes ~2 years and requires high capital due to its strict standards on pasteurization, air processing system, and personnel. Therefore, IMP will have good growth potential to penetrate ETC channel which is almost entirely owned by imported drugs.
- 3 plants aren't operating at 100% capacity, so it is expected to increase volume in 2018 and 2019 due to long-term positive industry outlook.
- IMP is building 2 more plants (in BInh Duong and VInh Loc) which capital are 150 bill and 470 bill respectively, meeting EU-GMP standard, and operating in 2019 and 2020. These 2 plants will especially promote ETC sales channel in hospitals.

Financial Statement Analysis:
Excellent financial position due to no borrowing, very low liabilities to equity ratio at 0.14, and positive cash flow from operation in all years. In2018,  cash balance reduced as IMP spent to invest for 2 new pharmaceutical plants.