Traphaco eliminates second-level branches, transforms with technology

People are having trouble because they are 'tightening their belts'

Traphaco Joint Stock Company (HOSE: TRA) has just announced documents for the 2025 Annual General Meeting of Shareholders, scheduled to be held at its headquarters in Hanoi on the morning of April 18.

Looking back at 2024, Traphaco's business activities appeared quite sluggish. Revenue recorded a modest growth of 1.7% over the same period last year, reaching VND 2,370 billion; meanwhile, profit after tax decreased by 9.7%, to only VND 257.3 billion. If placed next to the set plan, the enterprise only achieved 95.4% of the revenue target and 84.9% of the profit target.

In 2025, Traphaco presented to shareholders a plan to increase revenue by 8% compared to the same period last year, estimated at VND 2,559 billion; profit after tax is expected to increase by 4.3% to VND 268 billion. Illustrative photo

Traphaco's Board of Directors assessed that the past year was a challenging period for the pharmaceutical market, especially the OTC channel - the lifeblood of the business, contributing more than 90% of total revenue. Changes in customer consumption behavior caused sales on this channel to only reach 91.3% of the plan. Consumers tend to tighten their purse strings, prioritizing the use of medical examination and treatment services with health insurance instead of buying retail drugs at pharmacies. Health protection food products also witnessed a decline as people cut back on spending.

Fierce competition from modern pharmacy chains and e-commerce channels has made the situation even more difficult. Traphaco’s traditional pharmacies are under great pressure from professional online distribution systems with advantages in technology and supply chains.

Although not reaching all its targets, Traphaco has persistently adjusted its strategy and flexibly adapted to market movements. Thanks to that, the company has gradually consolidated its foundation, maintained its competitive advantage and ensured sustainable growth.

Determined to 'kill' secondary branches

In 2025, Traphaco presented to shareholders a plan to increase revenue by 8% compared to the same period last year, estimated at VND2,559 billion; profit after tax is expected to increase by 4.3% to VND268 billion. The pharmaceutical giant also aims to firmly consolidate its "throne" in the field of oriental medicine, while promoting the development of modern medicine as a strategic spearhead.

At the same time, Traphaco also focuses on improving sales capacity through the OTC channel by streamlining the human resources, optimizing operational efficiency, and ensuring compatibility with modern management models. At the same time, implementing a new sales policy that is simple, easy to remember, transparent in benefits, and providing maximum support for the pharmaceutical representative team for each product group.

Price control is tightened to limit over-supply, combined with product traceability, enhancing transparency and market trust.

In the ETC segment, Traphaco aims to exploit the bidding market deeply by focusing on bioequivalent products and traditional medicine groups that meet GACP standards; applying a flexible bidding strategy on price; proactively organizing seminars to introduce products, raising hospital awareness of bioequivalent drugs...

Notably, in order to keep up with changes in the legal context, modern governance models and market trends, as well as to enhance competitiveness and optimize resources, the Board of Directors proposes that the General Meeting of Shareholders consider dissolving the system of 25 second-level branches. The enterprise will rearrange its human resources based on the principle of prioritizing personal aspirations, maximizing existing capacity, arranging reasonable work in units within the system, ensuring streamlining, efficiency and strict compliance with legal regulations.

It is known that over the past two decades, the system of 25 second-level branches has played an important role in building and developing Traphaco's distribution network nationwide. However, in the face of profound legal changes, strong technological developments and shifts in governance models, this system has gradually revealed its shortcomings and is no longer suitable, leading to increased operating costs while the efficiency is not commensurate.

Currently, Traphaco is still a state-owned enterprise, with a 35.67% ownership ratio represented by the State Capital Investment Corporation (SCIC), equivalent to 14.7 million TRA shares. In addition, the shareholder structure also has a significant presence of foreign investors, when two foreign organizations hold more than 40% of the charter capital.

Specifically, Magbi Fund Limited owns 25% of shares, while Super Delta Pte. Ltd holds 15.12%. These are two representatives of Mirae Asset Investment Fund and Daewoong Pharmaceutical Company. Daewoong is one of the three largest pharmaceutical corporations in Korea, with annual revenue exceeding 1 billion USD.

TRA shares are currently priced at VND 75,000/share, equivalent to a market capitalization of VND 3,100 billion.

Sunshine

Source: https://congthuong.vn/traphaco-dep-bo-chi-nhanh-cap-hai-chuyen-minh-theo-cong-nghe-380515.html