DHG Pharmaceutical Faces Delisting Risk as Retail Ownership Falls Below 10%

Overview

Dược Hậu Giang (DHG) risks losing its public company status because retail shareholder ownership is only 5.68%, below the 10% minimum required by Vietnamese securities law. The company’s leadership is engaging with the State Securities Commission (SSC) for guidance, with a resolution expected within a year. This regulatory issue highlights a structural challenge common among state-owned enterprises after equitization.

Key Facts

• Retail shareholder ownership at DHG is 5.68%, below the 10% legal minimum for maintaining public company status.
• Major shareholders are Taisho Pharmaceutical (Japan) with 51.01% and SCIC (State Capital Investment Corporation) with 43.31%.
• The company reported 2025 revenue of nearly VND 5,270 billion and pre-tax profit of VND 904 billion, targeting 2026 revenue over VND 5,530 billion and pre-tax profit of VND 1,007 billion.
• DHG has over 4,000 small shareholders but their combined stake remains insufficient.
• Chairman Đặng Thị Thu Hà stated the company is awaiting SSC guidance, with a decision expected within a year.
• The issue was raised at DHG’s Annual General Meeting of Shareholders on April 21, 2025.

What Happened

At the Annual General Meeting of Shareholders on April 21, 2025, shareholders questioned DHG’s ability to maintain its public company status due to retail ownership falling short of the 10% threshold mandated by the Securities Law. In response, Chairman Đặng Thị Thu Hà confirmed the company has reviewed the matter and reported it to the SSC. She noted that many large Vietnamese public companies face similar situations, with SCIC also holding meetings with the SSC to discuss regulatory direction.

According to the chairman, DHG’s two major shareholders—Taisho and SCIC—express a desire to maintain public status to ensure transparency and uphold the company’s market brand. The company is exploring additional methods to meet shareholder ratio requirements and preserve its public listing. The SSC is expected to issue a decision within a year, after which DHG will comply accordingly.

Market Context

DHG trades on the Ho Chi Minh City Stock Exchange (HOSE) and closed at VND 100 on April 10, 2026, with a volume of 14,100 shares. The pharmaceutical sector in Vietnam has seen regulatory scrutiny increase, particularly around corporate governance and listing standards. This news introduces a regulatory overhang that could affect investor sentiment toward DHG, especially given its reliance on imported raw materials (80-90% of production costs) and modest 2026 profit growth targets.

Strategic Significance

The potential delisting risk underscores a broader structural issue in Vietnam’s equity market: post-equitization state-owned enterprises often struggle to maintain sufficient retail ownership due to dominant state and strategic investor stakes. For DHG, maintaining public status is critical not just for access to capital but for brand credibility and operational transparency, which are key in the regulated pharmaceutical industry. The outcome will signal how regulators balance strict compliance with practical realities for legacy enterprises.

What to Watch

• SSC’s formal decision on DHG’s public company status, expected within a year.
• Any share sales by Taisho or SCIC to increase retail ownership above 10%.
• DHG’s 2026 financial results to assess if growth targets (VND 5,530 billion revenue, VND 1,007 billion pre-tax profit) are met.
• Regulatory updates from the SSC on handling similar cases across the market.
• Changes in DHG’s shareholder structure filings on HOSE.