MIRA INFORM REPORT

Report Date :

11.08.2007

IDENTIFICATION DETAILS

Name :	PHARBACO CENTRAL PHARMACEUTICAL JOINT STOCK COMPANY NO. 1
Registered Office :	No.160 Ton Duc Thang Str, Dong Da Dist, Hanoi city
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	1955
Legal Form :	Joint Stock Company
Line of Business :	Producing and trading in many kinds of pharmaceutical products such as antibiotics, vitamins, cardiovasculars, anti-malaria, anti-tuberculosis. Producing and trading in medicine, chemical substance, cosmetic, medical instruments and equipment and producing health instruments

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

SUBJECT IDENTIFICATION & LEGAL FORM
Current Legal Form
English Name	PHARBACO CENTRAL PHARMACEUTICAL JOINT STOCK COMPANY NO. 1
Vietnamese name	CONG TY CO PHAN DUOC PHAM TRUNG UONG I – PHARBACO
Trade Name	PHARBACO., JSC
Originally Founded	1955
Type of Business	Joint Stock Company
Establishment Decision	286/QD-BYT
Issued on	January 25^th 2007
Issued by	Ministry of Health
Business Registration	0103018671
Issued on	July 25^th 2007
Issued by	Planning and Investment Department of Hanoi city
Registered Capital	49,000,000,000 VND
Tax code	0100109032
Total Employees	460 employees
Qualification	Fairly Good
Former Legal Form
English Name	CENTRAL PHARMACEUTICALS FACTORY NO.1
Vietnamese name	XI NGHIEP DUOC PHAM TRUNG UONG 1
Trade Name	PHARBACO
Type of Business	State owned enterprise
Establishment Decision	No.401/BYT/QD
Issued on	April 22^nd 1993
Issued by	Ministry of Health
Business Registration	No.108249
Issued on	May 20^th 1995
Issued by	Hanoi Planning and Investment Department
Registered Capital	6,915,000,000 VND
ADDRESSES
Head Office:
Address	No.160 Ton Duc Thang Str, Dong Da Dist, Hanoi city
Country	Vietnam
Tel	(84-4) 7322098 - 8437246
Fax	(84-4) 8237460
Email	marketing@pharbaco.com.vn
Website	www.pharbaco.com.vn
Factory
Address	Thach Loi village, Thanh Xuan commune, Soc Son Dist, Hanoi city
Country	Vietnam
Branch in Hai Phong city
Address	No.129 Tran Nguyen Han Str, Hai Phong City
Country	Vietnam
Tel	(84-31) 717 415
Fax	(84-31) 717 451
Manager	Mr. NGUYEN TAT HUE
Branch in Nam Dinh province
Address	No.74 Ben Thoc, Nam Dinh city, Nam Dinh province
Country	Vietnam
Tel	(84-350) 860040
Fax	(84-350) 863390
Branch in Thanh Hoa province
Address	No.536 Ba Trieu Str, Truong Thi ward, Thanh Hoa city, Thanh Hoa province
Country	Vietnam
Tel	(84-37) 850713
Branch in Nghe An province
Address	No.128 Phan Dinh Phung Str, Vinh city, Nghe An province
Country	Vietnam
Tel	(84-38) 833341
Branch in Da Nang city
Address	No 49 Tran Quoc Toan Str, Da Nang City
Country	Vietnam
Tel	(84-511) 821371
Branch in Hochiminh city
Address	2F Pham Huu Chi, Ward 12 – Dist 5, Ho Chi Minh City
Country	Vietnam
Tel	(84-8) 9571961/ 67/ 68
Fax	(84-8) 9571962
Notes: Beside these branches, the subject also has a distribution network in many other provinces and cities of Vietnam
DIRECTORS
1. NAME	MR. DINH XUAN HAN
Position	Chairman and General Director
Date of birth	November 05^th 1969
ID No.	125242731
Issued on	September 17^th 2003
Issued by	Police of Bac Ninh Province
Qualification	Pharmacist
Resident	No. 309, Alley 307 Bach Mai Str., Bach Mai Ward, Hai Ba Trung Dist., Hanoi City
Nationality	Vietnamese
Note: Formerly, when the subject was Central Pharmaceutical Factory No.1, Mr. Hoang Huu Doan was General Director.
2. NAME	Mr. LE TIEN DUNG
Position	Deputy director
Qualification	Pharmacist
Resident	No.160 Ton Duc Thang Str, Dong Da Dist, Hanoi city
Nationality	Vietnamese
3. NAME	Mr. TRAN THANG LOI
Position	Deputy director
Resident	No.160 Ton Duc Thang Str, Dong Da Dist, Hanoi city
Nationality	Vietnamese
BUSINESS NATURE AND ACTIVITIES
The subject now focuses on: - Producing and trading in many kinds of pharmaceutical products such as antibiotics, vitamins, cardiovasculars, anti-malaria, anti-tuberculosis… - Producing and trading in medicine, chemical substance, cosmetic, medical instruments and equipment and producing health instruments
The subject registered on manufacturing pharmaceutical products.
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports material and pharmaceutical products from Canada, Germany, China, India and Spain.
EXPORT: The subject exports to EU, Asia (Laos, Cambodia) and some countries in Africa.
BANKERS
1. INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM - DONG DA BRANCH
Address		No.178, Tay Son Str, Dong Da Dist, Hanoi City, Vietnam
Tel		(84-4) 8512620
Fax		(84-4) 8515394
Account No.		102010000073857
2. INDOVINA BANK
Address		No.88 Hai Ba Trung Str, Hoan Kiem Dist, Hanoi City
Tel		(84-4) 8260632
Fax No		(84-4) 8266320
3. BANK FOR FOREIGN TRADE OF VIETNAM (VIETCOMBANK)
Address		No. 198 Tran Quang Khai Str., Hoan Kiem Dist., Hanoi City
Tel		(84-4) 9343137
Fax		(84-4) 8269067
Telex		411504/411229 VCB – VT
Swift		BFTV  VNVX
SHAREHOLDER
The subject is a joint stock company now, Following is the shareholder structure of the subject
1. NAME		VIETNAM PHARMACEUTICAL CORPORATION
Address		No.138B Giang Vo Str., Ba Dinh Dist, Hanoi city
Tel		(84-4) 8443153/ 8443151
Fax		(84-4) 8443665
Shares		3,326,750 shares
Representative:
Mr. DINH XUAN HAN		No. 309, Alley 307 Bach Mai Str., Bach Mai Ward, Hai Ba Trung Dist., Hanoi City
Mrs. AN THI ANH THU		No. No.59 Road 158, Bach Dang Ward, Hai Ba Trung Dist., Hanoi City
Mr. NGUYEN DUC SON		No. 192C Quan Thanh Str., Quan Thanh Ward, Ba Dinh Dist, Hanoi City
2. NAME		585 OTHER SHAREHOLDER
Shares		1,573,250 shares
PAYMENT HISTORY AND EXPERIENCES
Trade Morality		Fairly good
Liquidity		Fair
Development trend		Bright
Past Payment Status		Fair
Current Payment Status		Fairly prompt
Past Financial Situation		Fairly good
Current Financial Situation		Developed
Illegal action		No recorded
Bankruptcy		No recorded
Reputation		Fairly good
Modes of payment		L/C, T/T

FINANCIAL DATA
BALANCE SHEET
Unit: VND million
Balance Sheet Date	31/12/06	31/12/05	31/12/04	31/12/03
Number of Weeks	52	52	52	52
ASSETS
A. Current assets & Short term Investment	96,077	96,340	226,159	95,557
I. Cash and cash equivalents	8,104	6,228	3,453	5,899
II. Short term investment	0	4,280	136,937	11,579
1. Short-term securities investment	0	0	0	0
2. Other short-term investment	0	4,280	132,887	11,579
3. Provision for devaluation of short-term investment	0	0	4,050	0
III. Receivables	47,162	44,523	42,318	35,910
1. Receivables from customers	33,574	0	0	0
2. Prepaid for providers	9,781	29,312	24,747	24,502
3. Value-added tax deducted	795	15,211	17,571	11,408
4. Internal receivables	0	0	0	0
5. Other receivables	3,012	0	0	0
6. Provision for bad receivables	0	0	0	0
IV. Inventory	40,811	39,929	41,723	40,550
1. Purchased goods in transit	0	0	0	0
2. Inventory raw materials	0	20,811	24,111	16,517
3. Inventory appliance	0	184	137	153
4. Cost for production and business in process	0	1,622	3,674	3,222
5. Inventory finished products	0	17,312	13,801	20,658
6. Inventory cargoes	40,811	0	0	0
7. Entrusted goods for sale	0	0	0	0
8. Provision for devaluation of stocks	0	0	0	0
V. Other current assets	0	1,380	1,728	1,619
1. Advances	0	1,380	1,728	1,619
2. Prepaid expenses	0	0	0	0
3. Pending expenses for transfer	0	0	0	0
4. Pending assets	0	0	0	0
5. Hypothecation, collateral and short run collateral	0	0	0	0
VI. Administrative	0	0	0	0
B. Fixed assets & Long term investment	234,512	169,744	16,630	18,622
I. Fixed assets	21,732	12,886	16,630	18,622
1. Tangible fixed assets	21,732	12,886	16,630	18,622
+ Original cost	41,159	57,961	51,333	49,118
+ Accumulated depreciation value	-19,427	-45,075	-34,703	-30,496
II. Long term investment	6,481	0	0	0
III. Capital construction in process	206,299	156,858	0	0
IV. Other	0	0	0	0
TOTAL ASSETS	330,589	266,084	242,789	114,179
LIABILITIES
A. Payables	277,155	227,833	208,018	86,932
I. Short term payables	107,136	92,234	84,992	83,082
1.Short-term borrowings	73,793	56,668	51,917	61,740
2. Due long-term liabilities	0	0	0	0
3. Payable to seller	20,818	28,923	31,693	19,040
4. Prepaid buyer	4,412	1,301	926	1,574
5. Taxes and accounts dutiable	656	-811	-1,806	-627
6. Employee payments	2,893	3,428	2,171	1,270
7. Internal payments	0	0	0	0
8. Other payables	4,564	2,725	91	85
II. Long term payables	170,019	135,599	123,026	3,850
1. Long-term borrowing	170,019	135,599	123,026	3,850
2. Long-term loans	0	0	0	0
III. Other liabilities	0	0	0	0
B. Owner’s Equity	53,434	38,251	34,771	27,247
I. Capital and Funds	51,284	36,004	34,151	27,485
1. Working capital	45,395	35,213	28,002	24,159
2. Differences from assets revaluation	0	0	0	0
3. Exchange rate differences	0	0	0	0
4. Business development fund	3,930	0	1,625	623
5. Reserved fund	578	0	124	0
6. Retained profit	1,381	791	4,400	2,703
7. Construction capital sources	0	0	0	0
II. Other administrative and fund sources	2,150	2,247	620	-238
1. Provident funds for unemployment	0	0	0	0
2. Welfare and reward funds	2,150	2,247	620	-238
3. Management funds of higher level	0	0	0	0
4. Functional operation funds	0	0	0	0
5. Fund sources formed by fixed assets	0	0	0	0
TOTAL LIABILITY AND EQUITY	330,589	266,084	242,789	114,179
PROFIT AND LOSE ACCOUNT
Description	FY 2006	FY 2005	FY 2004	FY 2003
Total revenue	166,990	162,043	171,060	143,884
Deductions Items	36	394	0	0
- Discount	0	0	0	0
- Devaluation of sale price	0	0	0	0
- Return of sold goods	0	394	0	0
- Turnover tax, excise tax, import and export duties to be paid	0	0	0	0
1. Net revenue	166,954	161,649	171,060	143,884
2. Original rate of goods for sale	129,421	125,365	143,204	123,653
3. Combined Profit	37,533	36,284	27,856	20,231
4. Sales costs	10,572	6,893	4,945	6,631
5. Enterprise administrative costs	18,049	18,486	13,829	9,568
6. Net income from business activity	8,912	10,905	9,082	4,032
Income from financial activities	318	38	50	51
Costs for financial activities	6,553	5,500	5,581	0
7. Net income from financial operation	-6,235	-5,462	-5,531	51
Irregular income	556	67	286	0
Irregular expenditure	186	75	108	0
8. Irregular Profit	370	-8	178	0
9. Total pre-tax profit	3,047	5,435	3,729	4,083
10. Income tax	853	1,522	1,044	1,306
11. After tax profit	2,194	3,913	2,685	2,777
FINANCIAL FACTORS
Description	FY 2006	FY 2005	FY 2004	FY 2003
Current liquidity ratio	0.90	0.07	2.66	1.15
Quick Liquidity ratio	0.52	-0.37	2.17	0.66
Inventory circle	3.17	6.28	4.10	3.55
Average receive period	103.11	100.29	90.30	91.10
Utilizing Asset Performance	0.51	0.61	0.70	1.26
Liability/ Total Asset (%)	83.84	85.62	85.68	76.14
Liability/ Owner’s equity (%)	518.69	595.63	598.25	319.05
Income before tax/ Total asset (%) ROA	0.92	2.04	1.54	3.58
Income before tax/ Owner’s equity (%) ROE	5.70	14.21	10.72	14.99
Income before tax/ Total revenue (%) NPM	1.82	3.35	2.18	2.84
Gross Profit / Total revenue (%) GPM	22.48	22.39	16.28	14.06
INTERPRETATION
The subject in the past was a State owned company named as Central Pharmaceuticals Factory No.1. In June 2007, the subject has been equitized following the dicision No. 286/QĐ-BYT issued on Jan 25^th 2007 and No. 2311/QĐ-BYT of The Minister of Health. Its legal capital is increased to 49 billion VND. Currently, the subject is focusing on producing pharmaceutical products. There are more than 100 kinds of products manufactured by PHARBACO ranging from antibiotics, vitamins, cardiovascular, anti-malaria, anti-tuberculosis… with various forms such as capsules, tables, coated tables, suspension, powder for injection… Annual volume of PHARBACO reaches about 2 billions tables, capsules; 50 millions inject-able ampoules and tens of millions of vials of powder for injection. PHARBACO’s products are manufactured on modern production lines with high technology conforming to GMP standard. In Vietnam pharmaceutical field, the subject plays an important role. Its products are supplied for Vietnamese people in all classes in all areas, from the North to the South. An amount of product is exported to Laos, Cambodia, Moldova, and countries in Africa. These products are highly appreciated in the market and account for a fairly rate in market share. Its position in the industry is fairly firm. The future prospect of the subject in the future is bright. According to above financial statement, its finance is fair. In 2004, the subject was one of ten units that had the highest turnover. However, business result in 2005 was not as good as that of 2004. In 2005, the subject’s liquidity was lower. Utilizing asset performance was not effective as before (investing 1 VND, the subject gets 1.61 VND). Its liability is big. But ROA and ROE indexes are fair. The subject’s financial structure is not very stable. However, you should know that these figures were only for Tax Department. In fact, they may be higher. Its total revenue in the first half of 2007 is about 92 billion VND, but its profit is just about 1 billion VND because of some changes in its operation. After equitization, the subject business efficiency seems better. The subject’s premises and facilities are large. Besides, the subject also has a system of branches and agents across the country. Currently, its business operation is very busy. Productivity of the subject is about 2 billion pills and 15 million ampoules per annum. The management of the subject is fair. PHARBACO has a team of staffs with more than 100 pharmacists and post-graduated pharmacists, bachelors and masters, 100 assistant pharmacists and over 300 workers. Basing on this strong foundation, PHARBACO is increasingly investing in researchers and market development. In short, the subject is one of company that is operating effectively. Its finance and operation are fair. The subject is capable to meet financial commitments. No caution needed for small and normal transactions with the subject.

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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