Long Chau, the pharmacy and vaccination chain operated by our portfolio company FPT Retail (FRT), made three announcements in the past month: a new store format featuring supplements and consumer goods, a medical testing service run through partner laboratories, and an exclusive deal with the government to provide healthcare kiosks across Ho Chi Minh City. The first is an expansion of the pharmacy retail core, while the other two extend Long Chau's service side – a smaller business today that we expect to become increasingly important as growth from new store openings eventually slows.

A New Store Format Weighted Toward Higher-Margin Products 

Long Chau opened the first Long Chau Plus store in Ho Chi Minh City in early August, a format that combines a pharmacy with a convenience store and stocks more than 1,500 items, with a wider range of supplements, personal care products, and mother and baby goods than the standard store. The change in product mix is what makes the format worth following, because supplements and personal care items carry higher gross margins than prescription and over-the-counter medicine, so selling more of them lifts store-level profitability without needing more customers through the door.

The first Long Chau Plus store launched August 8 in Ho Chi Minh City (Photo: FPT Long Chau) 

The timing follows two changes in the market. Household incomes are rising and demand for supplements with them, while enforcement against counterfeit and unregistered imports has tightened, which steers buyers toward sellers offering legitimate products with clear origins. With Long Chau having already established this across its pharmacy network, we expect the same proposition to help the chain expand further into supplements and health-related goods.

With only one Long Chau Plus store recently opened at the time of writing, it is too early for us to comment on the financial effect on FRT's consolidated results. However, we highlight this new format because it gives Long Chau the potential to raise margin from the store base it already owns, and that will become more valuable when the pace of new openings slows.

Lower Costs and Higher Value with Supporting Businesses 

Long Chau already combines its core pharmacy business and its 236 vaccination centers into a healthcare ecosystem built on shared brand recognition, client base, quality standards, and digital infrastructure. Diagnostics is the latest addition to this service mix, after vaccination, and is expected to become a profitable, asset-light business line for Long Chau. With affordable pricing for diagnostics (from around USD 15 for a cardiovascular panel to USD 195 for a multi-cancer screening test), Long Chau puts its new services well within reach of the same customers who already buy medicine and supplements at its counters.

Inside a Long Chau center during a free vaccination day for children (Photo: FPT Long Chau)  

The medical testing service began piloting in early August, covering general check-ups, liver and cardiovascular panels, and cancer screening. Five collection points are operating, each attached to an existing vaccination center. Long Chau handles customer acquisition, consultation, sample collection (including at the customer's home within 15 km), and follow-up care. It partners with accredited laboratories, Gene Solutions and LabHouse, to run the lab analysis. That division of work minimizes capital expenditure for FRT and keeps the company focused on its areas of expertise.

At the same time, Long Chau’s vaccination business line also sells into an underpenetrated market, with just around 1% of Vietnamese adults vaccinated against influenza compared with around 34% in Thailand and 64% in Korea, according to KPMG’s 2024 study. Low awareness of adult vaccination remains one factor behind the gap, leaving room for the market to grow as preventive healthcare becomes more familiar to Vietnamese consumers. Long Chau, with over 2,600 pharmacies across Vietnam, is well positioned to compete for market share on brand trust, service quality, and convenience.

Branded Healthcare Kiosks Under a Government Program 

On September 4, under Project 06, Vietnam’s national digital identity program, the Ho Chi Minh City Department of Public Security and Long Chau signed an implementation plan to expand the city's Digital Citizen Station network to at least 168 sites by the end of Q2/2027. The stations run on VNeID, Vietnam's national electronic identification and authentication platform, which connects to the National Population Database. (Our portfolio company FPT Corporation (FPT), which holds around 46.5% of FPT Retail (FRT), is also working on the national database as a state-appointed technology partner). Meanwhile, according to the September 4 agreement, Long Chau is the only healthcare operator in this program.

A Long Chau kiosk at an E-Citizen Hub in Ho Chi Minh City (Photo: FPT Long Chau)

So far, health services account for most of the traffic at the eight stations in operation. Of more than 83,000 visits recorded by the city police, over 62,000 were health measurements, against nearly 21,000 for administrative procedures. Each station provides blood pressure, height, weight, and heart rate readings, along with remote consultation connected to 12 hospitals and clinics in the city, vaccination booking, and medicine delivery.

Residents who enter a Long Chau kiosk to have their blood pressure checked and to consult a doctor can then be referred to a Long Chau pharmacy or collection point for detailed check-ups or prescriptions. The kiosks, sited in residential areas across the city, work as a free entry point to Long Chau’s businesses. Participating in a government-backed program also helps Long Chau strengthen its positioning as a broader healthcare provider rather than simply a pharmacy chain.

What These Developments Mean for FRT

Long Chau is where FRT's earnings are made, which is why changes to how it operates carry weight. The chain generated around USD 820 million of revenue in the first half of 2026 (H1/2026), up 33% year-over-year (YoY) and close to 70% of FRT's consolidated revenue. FRT also operates the FPT Shop electronics chain, but that segment produced only around USD 8 million of earnings before interest, taxes, depreciation, and amortization (EBITDA) in H1/2026, compared with roughly USD 55 million at Long Chau's pharmaceutical business.

Store openings have driven most of Long Chau's growth and will keep contributing for several years, given how much of Vietnam outside the largest cities is still served by independent outlets. As discussed in our earlier note on Decree 90/2026, regulation continues to favor compliant operators in a market still dominated by independent pharmacies. These recent developments address the period after that, when the network is built out and further growth comes from value per customer.

We do not expect any of the three developments above to change FRT's 2026 earnings on their own, since each is at an early stage or single-store scale. However, they describe a company treating its pharmacy counters as distribution points for healthcare services. That is the change we are following, because it determines whether Long Chau's profitability keeps rising once its pharmacy network matures.

The Kenno Vietnam Fund invests in fundamentally sound Vietnamese companies at attractive valuations. FRT is one of our holdings, and our conviction rests on Long Chau's scale in a market still dominated by independent pharmacies, its record of raising revenue per store while expanding, and a regulatory environment that continues to favor compliant operators. If you would like to learn more about the fund or our investment approach, feel free to reach out to us.