Continuously punished in the medical field, FPT Long Chau opens vaccination

FPT Long Chau "massively" expanded its pharmacy chain, sold drugs without prescription, and a series of violations were continuously handled by local authorities.

By the end of September 2023, the number of FPT Long Chau pharmacy chains of FPT Digital Retail Joint Stock Company (FPT Retail) reached 1,384 stores, opening 447 new pharmacies compared to the beginning of 2023. This is considered the implementation of the strategy to increase the number of Long Chau pharmacy chains of FPT Retail, in line 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 on the FPT Long Chau pharmacy chain with the goal of opening 400 new stores, increasing the number of stores in the entire chain to 1,400 to 1,500.

Wet waist business is continuously being prosecuted in the medical field. FPT Long Chau pharmacy is still in the expansion phase. Image 1 — The opening event of FPT Long Chau's 1,000th pharmacy. Photo: FPT Long Chau

Also at this meeting, a rather bright "prospect" was reported 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 operation optimization, FPT Long Chau will continuously recruit, train, and improve the professional capacity and service skills of the pharmacist team to be able to bring trust and the most dedicated service to customers...

Many shareholders also agreed and said that this is also considered a goal that FPT Long Chau pharmacy chain needs to complete soon when in the recent past, this pharmacy chain has been continuously discovered by local authorities for violations and decisions to punish.

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 2023, the Inspector of the Ho Chi Minh City Department of Health fined FPT Long Chau Pharmaceutical Joint Stock Company (176 Ong Ich Khiem, Ward 5, District 11) 15 million VND for not complying with regulations on retail pharmacy practices.

Then, also in January 2023, the Department of Drug Administration, Ministry of Health concluded an inspection on the implementation of legal regulations on drug trading and compliance with GPs in Khanh Hoa province. Accordingly, Long Chau 632 Pharmacy - FPT Long Chau Pharmaceutical Joint Stock Company, the Inspection Team assessed that the pharmacy's standard operating procedure system is still sketchy, not fully meeting the entire operation. The pharmacy also does not have a procedure for arranging and presenting, a procedure for cleaning the pharmacy, and a procedure for monitoring adverse drug reactions (ADR). Many other shortcomings were also clearly pointed out by the inspection conclusion, such as: no procedure for cleaning the pharmacy, a procedure for monitoring adverse drug reactions; no strict sensory inspection when importing drugs, hanging signs advertising functional foods without mandatory information for functional products...

Previously, in 2022, a series of FPT Long Chau pharmacies were also fined, such as: FPT Long Chau 83 Pharmacy, address 313 Hai Ba Trung, Le Chan District, Hai Phong City, committed the following violations: No certificate of eligibility for pharmaceutical business; Long Chau 130 Pharmacy, address 173 Cat Cut, Le Chan, Hai Phong City, committed the following violations: Not complying with GPP regulations in drug storage; Long Chau 131 Pharmacy, address 22C Le Loi, Ngo Quyen, Hai Phong City, committed the following violations: Not posting retail prices of drugs. No measures to isolate or store expired drugs in a separate storage area. Or in September 2022, 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 selling antibiotics and prescription drugs without a doctor's prescription and was fined 34 million VND by the Hanoi Department of Health Inspectorate.

Although it had a "plan" to develop the system and optimize the operation of FPT Long Chau, this pharmacy chain after the 2023 Annual General Meeting of Shareholders continued to be punished by local authorities for a series of violations in the medical field, specifically: On September 7, 2023, the interdisciplinary delegation of Huong Khe district (Ha Tinh) conducted an inspection at Long Chau Pharmacy 1179 located at 243 Tran Phu Street, Huong Khe town (Ha Tinh). Here, the delegation discovered that this pharmacy had committed an administrative violation: incompletely posting wholesale and retail prices in Vietnamese Dong, causing confusion for customers at the drug sales location of the medical pharmaceutical business establishment.

On October 30, 2023, the People's Committee of Da Lat City fined FPT Long Chau Pharmaceutical Joint Stock Company - the business location of Long Chau 880 pharmacy at 33A Nguyen Sieu Street, Ward 7 for violating the provisions of Decree No. 117/2020/ND-CP dated September 28, 2020 of the Government on administrative sanctions in the health sector. Accordingly, when inspecting the business location of Long Chau 880 pharmacy at 33A Nguyen Sieu Street, the authorities discovered that the person in charge of the pharmacy's professional expertise was absent during operating hours; the listing was incomplete and unclear, causing confusion for customers; no books were opened, no computers were used to manage drugs.

Most recently, in October 2023, the Hai Phong Department of Health informed that Long Chau 83 Pharmacy, located at 313-315 Hai Ba Trung, Le Chan District, Hai Phong City, had violated the sale of prescription drugs without a prescription; Long Chau 611 Pharmacy, located at 138 Tran Tat Van, Kien An District, Hai Phong City, had violated the regulation on periodic reporting on pharmaceuticals.

Profits plummeted, why did FPT Retail, which was profitable, suddenly report 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 VND14,000 billion. Accordingly, revenue in 2023 is expected to reach VND34,000 billion, up 13%, and pre-tax profit of VND240 billion, down 51% compared to the results in 2022.

This was also confirmed when Tien Phong Securities Company in October 2023 forecasted that the average revenue per store of this chain in 2023 would be 12.2 billion VND. Equivalent to an average of more than 1 billion VND/store/month.

This is also consistent with data showing that FPT Long Chau's average revenue/pharmacy/month was nearly VND 1.1 billion in the first 9 months of the year. Accordingly, the cumulative revenue of the FPT Long Chau chain in the first 9 months of 2023 reached VND 11,088 billion, an increase of 69% over the same period last year.

However, the rapid increase in the number of FPT Long Chau pharmacy chains to gain market share and increase revenue to the "huge" number above is also the reason why the parent company's profits have suffered heavy losses.

The consolidated financial report shows that FRT's third-quarter revenue reached nearly VND8,266 billion, a slight increase of 6.8%. Since the second quarter of 2022, the company's revenue has continuously maintained at VND7,000-8,500 billion.

Wet waist business is continuously being prosecuted in the medical field. FPT Long Chau pharmacy is still in the expansion phase. Image 2

However, the after-tax profit in the third quarter was negative VND13 billion, while in the same period last year it was more than VND85 billion. The company explained that the after-tax profit changed from profit to loss because the Long Chau chain opened 584 new stores compared to the third quarter of last year. Therefore, it contributed significantly to the consolidated revenue growth of the whole company, but 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 company also lost 215 billion VND after tax. After reaching a profit peak in the fourth quarter of 2021, the profits of the Long Chau pharmacy chain owner continued to plummet.

Wet waist business is continuously prosecuted in the medical field. FPT Long Chau pharmacy is still in the expansion phase. Image 3

Will betting on vaccination pay off?

In addition to the pharmaceutical retail segment, FPT Retail has recently expanded its disease prevention and vaccination segment with two vaccination facilities in Ho Chi Minh City and two 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 company 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 the potential of this vaccine segment is still great. If the vaccination rate can be increased, the number of severe cases in some disease groups will decrease significantly, 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 high demand for vaccinations makes vaccination centers a potential niche market in the healthcare sector in Vietnam. However, competition is also fierce as vaccination service centers have continuously expanded in recent years.

Private hospitals such as Hong Ngoc, Vimec, Medlatec,... to clinic systems such as Nhi Dong 315 with available facilities and human resources are all participating in redistributing the "cake" of the vaccination industry.

In addition, businesses with pharmaceutical business ecosystems with familiar brands such as the VNVC system of Vietnam Vaccine Joint Stock Company (VNVC) or Vaccine and Biological Products Company No. 1, SAFPO Vaccination Service Room of AMV Group (formerly Duc Minh Pharmaceutical Joint Stock Company)... are also formidable competitors to Long Chau.

In addition, Tien Phong Securities Company also mentioned the increasing competitive pressure in the pharmaceutical retail sector when many competitors join the pharmaceutical retail chain. Specifically, Dongwha Pharm Group (Korea) also started participating in the pharmaceutical retail market from October 2023.

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