FPT Long Chau "massively" expanded its pharmacy chain, selling drugs without prescription, along with a series of violations that were continuously handled by local authorities.
By the end of September 9, the number of FPT Long Chau pharmacy chains of FPT Digital Retail Joint Stock Company (FPT Retail) reached 2023 stores, opening 1.384 new pharmacies compared to the beginning of 447. This is considered the implementation of FPT Retail's strategy to increase the number of Long Chau pharmacy chains, in accordance with the content reported at the 2023 Annual General Meeting of Shareholders. Accordingly, Chairman of the Board of Directors of FPT Retail - Nguyen Bach Diep said that this year the company will focus its efforts on the FPT Long Chau pharmacy chain with the goal of opening 2023 new stores, increasing the number of stores in the entire chain to 400 to 1.400.
FPT Long Chau's 1.000th pharmacy opening event. Photo: FPT Long Chau
Also at this meeting, a quite bright "prospect" was announced when according to the 2023 plan, FPT Retail expects the FPT Long Chau pharmacy chain to bring in 14.000 billion VND. In parallel with system development and operational optimization, FPT Long Chau will continuously recruit, train, and improve the professional capacity and service skills of the pharmacist team to bring trust and confidence. The most dedicated service to customers…
Many shareholders also agree and believe that this is also a goal that the FPT Long Chau pharmacy chain needs to soon complete when in recent times, this pharmacy chain has been continuously detected by local authorities. detect violations and decide on penalties.
That is, in early 2023, right before the 2023 Annual General Meeting of Shareholders, a series of violations at FPT Long Chau pharmacies were discovered and punished, specifically: In January 1, the Department of City Health. Ho Chi Minh City fined FPT Long Chau Pharmaceutical Joint Stock Company (2023 Ong Ich Khiem, Ward 176, District 5) 11 million VND for not complying with regulations on drug retail practice.
Next, also in January 1, the Drug Administration of Vietnam, Ministry of Health concluded an inspection on the implementation of legal regulations on drug trading and compliance with GPs in Khanh Hoa province. Accordingly, at Long Chau Pharmacy 2023 - FPT Long Chau Pharmaceutical Joint Stock Company, the Inspection Team assessed that the pharmacy's system of standard operating procedures is still sketchy and does not fully meet the entire operation. The pharmacy also does not have a presentation arrangement process, pharmacy cleaning process, or adverse drug reaction (ADR) monitoring process. Many other shortcomings were also clearly pointed out by the inspection conclusions such as: there is no pharmacy cleaning process or monitoring process for adverse drug reactions; There is no strict sensory inspection when importing drugs, there are signs advertising functional foods without mandatory information for functional products...
Previously, even in 2022, a series of FPT Long Chau pharmacies were also sanctioned such as: FPT Long Chau Pharmacy 83, address 313 Hai Ba Trung, Le Chan District, City. Hai Phong has committed violations: Not having a certificate of eligibility for pharmaceutical business; Long Chau Pharmacy 130, address 173 Cat Cut, Le Chan, City. Hai Phong has committed violations: Not complying with GPP regulations in preserving drugs; Long Chau Pharmacy 131, address 22C Le Loi, Ngo Quyen, City. Hai Phong has committed a violation: Not posting drug retail prices. There are no quarantine measures or storage areas for expired drugs. Or in September 9, FPT Long Chau was also fined by the People's Committee of Cao Bang City for violating advertising activities and advertising regulations on advertising banners.
Even in 2022, FPT Long Chau pharmacy chain was involved in a scandal when it was discovered to sell antibiotics and prescription drugs without a doctor's prescription and was fined 34 million VND by the Hanoi Department of Health Inspectorate. .
Despite having "planned" to develop the system and optimize the operation of FPT Long Chau, this pharmacy chain after the 2023 Annual General Meeting of Shareholders continues to be fined by local authorities for series of violations in the health sector, specifically: On September 7, 9, the interdisciplinary team of Huong Khe district (Ha Tinh) conducted an inspection at Long Chau 2023 Pharmacy located at 1179, Tran Phu Street , Huong Khe town (Ha Tinh). Here, the delegation discovered that this pharmacy had committed an administrative violation: incompletely listing wholesale and retail prices in Vietnam Dong, causing confusion for customers at the place where the pharmacy's drugs were sold. international.
On October 30, 10, the People's Committee of Da Lat City sanctioned FPT Long Chau Pharmaceutical Joint Stock Company - Long Chau pharmacy business location 2023 at 880A Nguyen Sieu Street, Ward 33 due to violating regulations in the Decree. No. 7/117/ND-CP dated September 2020, 28 of the Government on sanctioning administrative violations in the health sector. Accordingly, when inspecting the Long Chau 9 pharmacy business location at 2020A Nguyen Sieu Street, the authorities discovered that the person in charge of the pharmacy was absent during operation; Incomplete and unclear listing causes confusion for customers; Do not open books or use computers to manage medications.
Most recently, in October 10, the Hai Phong Department of Health announced that Long Chau 2023 pharmacy is located at 83-313 Hai Ba Trung, Le Chan District, City. Hai Phong has a violation of selling prescription drugs without a prescription; Long Chau Pharmacy 315, address 611 Tran Tat Van, Kien An District, City. Hai Phong has committed violations of not implementing the periodic reporting regime on pharmaceuticals.
Profits plummeted "unpredictably", why did FPT Retail, which was profitable, suddenly reported a heavy negative loss compared to the same period last year?
At the 2023 Annual General Meeting of Shareholders, FPT Retail expects the FPT Long Chau pharmacy chain to bring in 14.000 billion VND. Accordingly, 2023 revenue is expected to reach 34.000 billion VND, an increase of 13% and pre-tax profit of 240 billion VND, a decrease of 51% compared to 2022 results.
This was also confirmed when Tien Phong Securities Company in October 10 made a forecast that the average revenue per store of this chain in 2023 is 1 billion VND. Equivalent to an average of more than 2023 billion VND/store/month.
This is also appropriate when data shows that FPT Long Chau's average revenue/pharmacy/month was nearly 1,1 billion VND in the first 9 months of the year. Accordingly, the accumulated revenue in the first 9 months of 2023 of the FPT Long Chau chain reached VND 11.088 billion, an increase of 69% over the same period last year.
However, accelerating the number of FPT Long Chau pharmacy chains to gain market share and increase revenue to the above "huge" number is also the reason why the parent company's profits suffered heavy losses.
The consolidated financial report shows that FRT's third quarter revenue reached nearly 8.266 billion VND, a slight increase of 6,8%. Since the second quarter of 2022, this company's revenue has continuously maintained the level of 7.000-8.500 billion VND.
However, the third quarter's profit after tax was negative 13 billion VND while the same period last year's profit was more than 85 billion VND. The business explained that its profit after tax changed from profit to loss because the Long Chau chain opened 584 new stores compared to the third quarter of last year. Therefore, it contributes significantly to the consolidated revenue growth of the entire company, however, Long Chau is in the expansion phase so it has not contributed much in terms of profit.
Not only did it lose money in the third quarter, in the second quarter, this business also had an after-tax loss of up to 215 billion VND. After setting a profit peak in the fourth quarter of 2021, the profits of the Long Chau pharmacy chain owner continuously plummeted.
Will betting on vaccination be successful?
In addition to the medicine retail segment, FPT Retail has recently expanded the disease prevention and vaccination segment with 2 vaccination facilities in Ho Chi Minh City and 2 vaccination facilities in Hanoi. Previously, vaccination in Vietnam was mainly provided by hospitals and public health centers.
However, in the past 5 years, vaccination services have been expanded by private service organizations.
This business estimates that the current vaccine coverage rate in Vietnam is about 4% of the population, while many other countries in the region are 15-30%, so there is still a lot of potential in this vaccine segment. If the vaccination rate is increased, the number of severe cases in some disease groups will be significantly reduced, both improving public health and saving a lot of medical examination and treatment costs.
Accordingly, FPT Long Chau vaccination center serves disease prevention, FPT Long Chau pharmacy serves disease treatment.
The large demand for vaccination makes vaccination centers a potential niche market in the health sector in Vietnam. However, competition is also very fierce as vaccination service centers have continuously expanded in recent years.
Private hospitals such as Hong Ngoc, Vimec, Medlatec,... to clinic systems such as Children's 315 with available facilities and available human resources all participate in redistributing the "piece of cake" of the vaccination industry.
In addition, businesses have drug business ecosystems with familiar brands such as the VNVC system of Vietnam Vaccine Joint Stock Company (VNVC) or No. 1 Vaccine and Biological Products Company Limited, Injection Clinic. AMV Group's SAFPO service line (formerly known as Duc Minh Pharmaceutical Joint Stock Company)... are also formidable competitors to Long Chau.
In addition, Tien Phong Securities Company also mentioned increased competitive pressure in the pharmaceutical retail segment when many competitors join the drug retail chain. Specifically, Dongwha Pharm Group (Korea) will also begin participating in the drug retail market from October 10.
