Golden Opportunity for Foreign Capital in the Hospital Sector
According to information from the State Securities Commission, TNH has been officially approved to adjust the maximum foreign ownership ratio from 49% to 70%. This decision is considered by the Board of Directors as a strategic move, helping TNH shares increase liquidity, while enhancing the ability to mobilize capital and expand the scale of operations, towards a shareholder structure with deeper participation of foreign investors.
Currently, TNH has a strong presence of foreign organizations, with four investment funds being major shareholders, holding a total of 32% of charter capital. Of which, KWE Beteilgungen AG is the largest shareholder with 10.5% of shares. Immediately after the room expansion announcement in early June 2024, TNH’s stock price reacted positively, increasing by 35% in one month, reaching a historical peak of VND28,500/share on July 9. However, the market price has slightly adjusted to VND23,300/share by the end of the trading session on August 28.
TNH’s room expansion event took place in the context of a wave of foreign investment in Vietnam’s healthcare industry that is taking place vigorously. Not only TNH, foreign investors are also continuously acquiring shares of domestic pharmaceutical enterprises. Typically, SK Investment – the second largest corporation in Korea – is dominating Imexpharm (IMP) with 64.8% of capital, while Japanese pharmaceutical company ASKA Pharmaceutical Co., Ltd owns 35% of Ha Tay Pharmaceutical (DHT). The hospital sector is of particular interest but has a rather limited supply of investment opportunities. Evidence is that major M&A deals took place in 2023, including Thomson Medical’s acquisition of FV Hospital for 381 million USD and Raffles Medical’s investment in American International Hospital (AIH). VinaCapital’s VOF Fund also holds a controlling stake in Tam Tri Medical.
Rapid Expansion Plan and Record Profit Target
In addition to attracting foreign capital, TNH International Hospital is also implementing an ambitious business and expansion plan. The company targets net revenue of VND540 billion (up 2%) and after-tax profit of VND155 billion (up 12%) this year compared to the same period. If completed, this will be a record high profit figure for the enterprise. However, business results for the first 6 months of the year show that TNH recorded net revenue of VND222 billion (down 3%) and after-tax profit of VND54 billion (down 13%), reaching 41% of the revenue plan and 35% of the yearly profit target.
Notably, TNH has proposed adding a new business line of preventive medicine activities , focusing on vaccination services and disease prevention vaccination. TNH General Director, Mr. Le Xuan Tan, explained that the demand for vaccination outside the expanded immunization program has increased significantly after the COVID-19 pandemic. He emphasized that the hospital’s advantage is its high expertise in vaccination and especially its ability to provide emergency care, which helps TNH not be afraid of competition and easily cooperate with other vaccination facilities. In the near future, this service will be strongly deployed at TNH Viet Yen Hospital (Bac Giang) – an area with a large concentration of workers in industrial parks.
Regarding network development strategy, TNH currently has two operating facilities in Thai Nguyen and is waiting for the Ministry of Health to grant a license to TNH Viet Yen Hospital (Bac Giang). At the same time, the company is implementing the investment project of TNH Lang Son Hospital with a scale of 300 beds and establishing a joint legal entity TNH Hanoi Hospital Joint Stock Company to implement a project with a scale of 500 beds in Nam Thang Long Urban Area (Ciputra).
Looking at the 10-year long-term vision, Chairman of the Board of Directors, Mr. Hoang Tuyen, revealed that TNH plans to build a chain of 10 hospitals covering the whole country by 2030, including general hospitals and specialized hospitals such as oncology, obstetrics, eye, or stroke. Mr. Tuyen said that TNH does not compete directly in Hanoi with existing large hospitals, because the market is overloaded. Instead, a strategic advantage of TNH is the satellite hospital model. “When TNH Hanoi comes into operation, we will have 5 satellite hospitals in neighboring provinces,” Mr. Hoang Tuyen said. The hospitals in Hanoi, Ho Chi Minh City and Da Nang will later act as the final line, as well as training centers, providing high-quality human resources for other facilities in TNH’s chain.
