And there is still room to grow. Mexico is the second largest market in Latin America for the pharmaceutical industry, and is a major producer of high-tech medicines, including antibiotics, anti-inflammatories, and cancer treatments.
Corporativo Fragua considers that Mexico has become an attractive destination to invest in the pharmaceutical industry, due to the improvement of the regulatory framework and the increase in quality certifications. However, with the health emergency due to COVID-19, manufacturers face the challenge of increasing production and maintaining supply chains.
“Mexican companies are well positioned to take advantage of expansion opportunities, as they operate in the largest Spanish-speaking country in Latin America, which has 126.2 million inhabitants. Mexico is a country with a large and growing middle class, a favorable environment for private sector investments and a rapid increase in the demand for health care services, both in health benefits and pharmaceutical products, “said the company in its 2020 annual report.
Little shine in bag
The aggressive expansion strategy has allowed the company to have solid finances, with double-digit sales growth; it is also a challenge, since you must keep operating expenses at a healthy level that allows you to cut the bar on new units without undermining the company’s finances.
In the first semester of the year, Corporativo Fragua recorded sales of 40,629 million pesos, an increase of 18.3% compared to the 34,324 million pesos of the same period of the previous year. The sales of the branches with more than a year in operation, had a growth of 15.1%.
Meanwhile, the net profit for the semester was 1,237 million pesos, 33.6% more in its annual comparison. However, even with these results, the company’s papers have seen little movement in the stock market in recent years. At the end of the trading day on August 12, the shares closed with an individual price of 340 pesos, 1.5% above the previous close.
Although in recent years the stock remained around 219 pesos per paper, since the beginning of 2020 it has managed to rebound and marked a historical maximum of 364.66 pesos per title on the day of May 30.
“Its stock is very low on the stock market and ownership is concentrated in the hands of the family, so for that reason there is not much interest in the market. Certainly, it has had a very interesting performance in the last decade in which its geographic expansion landed, positioning itself as one of the main players at the national level, ”says Carlos Hermosillo, an independent stock market analyst. “I believe that with a good program to support its marketability, the stock could help it finance a new impulse to position itself as one of the players that consolidate the sector in Mexico; I don’t know if it’s in their plans, but it would be interesting ”.
Corporativo Fragua debuted on the Mexican Stock Exchange (BMV) on October 3, 1997 with an Initial Public Offering (IPO) for 230.4 million pesos, which represented 20% of the company’s capital. The resources were used for the geographic growth of the Super Pharmacies, a concept created in 1989, and with which they market medicines, beauty and personal hygiene products, food and household products, among others.