We are of the view that the prospect for the pharmaceutical industry to remain prospective in the near to medium term. Demand for pharmaceutical products should remain robust, especially those related to handle the Covid-19 pandemic, despite the weakening purchasing power and supply chain disruptions due to mobility restrictions. The pandemic has spurred the growing awareness of health, encouraging people to access more pharmaceutical products, such as multivitamins and other supplements. Long-term growth is also prospective, given the favorable demographic profile, easier access to healthcare facilities, and better digital health ecosystem. However, the high dependence on imported raw materials will remain a challenge in this industry due to its vulnerability to logistic disruptions and fluctuation of exchange rate. Regarding the competitive landscape, the local pharmaceutical industry is highly fragmented with numerous players, especially in the downstream segment. However, we expect domestic companies to remain dominant, while deregulation of foreign ownership may threaten the existing players.
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