Vietnam’s healthcare sector continues to benefit from structural policy support, and domestic pharmaceutical leaders are well positioned to capture this momentum. Traphaco (TRA) stands out as a clear example, supported by favorable market conditions and a timely leadership transition that should strengthen execution over the coming years. Our recent meeting with the company's new management has reinforced our confidence in its ability to enter a new phase of growth.
Supportive Macro Backdrop
An aging population and rising household incomes are supporting steady growth in healthcare needs in Vietnam. Demand for chronic treatments will expand as the elderly population is forecasted to double to 30 million people by 2050. According to IQVIA Vietnam, per capita pharmaceutical consumption has increased steadily, with total market value projected to grow from USD 7.6 billion in 2024 to approximately USD 12 billion by 2030.
In addition, over the past year, we have seen the amended Law on Pharmacy and Circular 40 prioritizing domestically manufactured drugs in hospital bidding and procurement, the nationwide crackdown on counterfeit supplements, and the revised Tax Administration Law contributing to a fairer market by raising costs for unregistered sellers of imported medicines.
Through improving healthcare policies, Vietnam continues to prioritize affordability, self-sufficiency, and the use of compliant, locally produced medicines. This includes ongoing support for traditional and herbal pharmaceuticals, where TRA has long held a leading position through its 53-year operating history and trusted domestic brands.
Timely Leadership Transition
Alongside these macro tailwinds, TRA is entering a fresh phase of leadership with a new CEO appointed in Q4/2025. Since then, we have seen encouraging developments in the company's growth areas, including accelerating brand development, driving product innovation, and expanding premium offerings.
The ongoing management transition focuses on reinforcing the company’s leading position in Eastern herbal medicine while scaling higher-value Western medicine products. In particular, TRA is developing a facility designed to meet European Union Good Manufacturing Practices (EU-GMP). Achieving EU-GMP standards would allow TRA to significantly raise its competitiveness in the Western medicine segment.
Our View
Taken together, the combination of leadership renewal and favorable structural tailwinds positions TRA well for the years ahead. While short-term performance will continue to reflect market conditions and regulatory timing, we believe the company is structurally aligned with Vietnam’s long-term healthcare priorities.
At Kenno, we follow company-level developments as well as policy changes shaping the operating environment for our portfolio companies. Our investment in TRA reflects our focus on high-quality consumer businesses that deliver superior shareholder returns in the long term.
For investors seeking exposure to Vietnam through actively managed, on-the-ground investment strategies, the Kenno Vietnam Fund provides access to fundamentally sound businesses that benefit from the country's growing consumer market.
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