Lotus Pharmaceutical (Lotus) achieved an impressive EPS of NT$9.05 in the first half of this year, securing its position as the third most profitable company in the biotech sector. During an investor conference on the 15th, Deputy General Manager Bjartur Shen announced that the company is targeting the lucrative ASEAN market and has launched a three-pronged strategy: acquiring niche pharmaceutical companies, integrating and acquiring branded drugs, and creating economies of scale. The goal is to increase revenue by five times within the next three to five years, aiming to reach NT$5 billion.
Lotus has shown strong operational performance, with July's consolidated revenue reaching NT$2.72 billion, marking a new high for this year. The cumulative revenue for the first seven months has already surpassed the NT$10 billion mark, totaling NT$11.66 billion. In the second quarter, the company’s net profit after tax was NT$1.332 billion, representing a 28% increase from the previous quarter and a 5% year-on-year growth, with an EPS of NT$5.09.
Shen highlighted that Southeast Asia is the fastest-growing pharmaceutical market in the Asia-Pacific region, with a compound annual growth rate (CAGR) of 6.2% expected from 2024 to 2028. As populations age and health awareness increases, more regions are focusing on managing chronic diseases. However, international pharmaceutical giants have yet to prioritize the ASEAN market, leaving room for development. Local pharmaceutical companies are numerous but relatively small in scale; for instance, Vietnam and Thailand each have nearly 400 domestic pharmaceutical companies, presenting Lotus with significant growth opportunities.
Lotus' largest shareholder, PTT, one of Thailand’s biggest state-owned enterprises, has successfully applied its growth strategy to Southeast Asia through acquisitions. The three strategic steps are: 1) acquiring small companies with expertise or technology in specific medical fields, 2) integrating Lotus’s own product portfolio with acquired branded generics, and 3) creating economies of scale by establishing R&D and manufacturing capabilities tailored to the Southeast Asian market.
Shen noted that Lotus completed the acquisition of Teva Pharmaceutical’s Thai subsidiary in July, with revenue contributions expected to start in August. This acquisition will help expand sales channels to retail pharmacies, and post-acquisition, revenue from ophthalmology and respiratory products in Thailand is expected to triple, reaching approximately $20-25 million.
Additionally, Lotus is evaluating three new acquisition opportunities: the branded generics and portfolios of a major Vietnamese pharmaceutical company and a large Southeast Asian brand, with agreements potentially being signed as early as the third quarter. The Vietnamese company has an annual revenue of about $21-25 million, and the other two companies under negotiation each generate about $20-30 million in annual revenue. Combined, these projects could contribute at least $100 million in revenue, with a gross margin of around 50-60%.
Shen emphasized that the ASEAN market currently contributes approximately NT$1 billion in annual revenue, compared to NT$2.5 billion from Taiwan and NT$6 billion from South Korea, highlighting its smaller scale. Lotus aims to achieve fivefold revenue growth in the ASEAN market over the next three to five years, raising annual revenue to NT$5 billion through both external acquisitions and organic growth.
Resource (mandarin): 美時祭三箭 東協市場營收拚3～5年內增5倍
