·         In Q1 2023, Mocchau Dairy Cattle Breeding (Upcom: MCM) announced net revenue of VND734 bn (-6.7% QoQ, +8.8% YoY) and NPAT-MI of VND101 bn (+39.7% QoQ, +18.4% YoY). The strong growth in the bottom-line was driven by SG&A cost optimization as well as high financial profit from bank deposits. MCM's net profit margin increased from 9.2% in Q4 2022 to 13.8% in Q1 2023 - the highest level since being acquired by Vinamilk. This demonstrates the effective of the synergy between Vinamilk and Mocchau Milk, resulting in positive profit growth.   

·         We expect 2023 sales growth to come from an increase in both volume and selling prices, reaching VND3,466 bn (+10.6% YoY). 2023 net profit is expected to grow at a slower pace than revenue, reaching VND368 bn (+6.2% YoY). The main reasons are: 1) input costs (raw milk and sugar) are expected to increase from Q2 2023, and 2) SG&A expenses will rise correspondingly with the market share expansion strategy. 2023 EPS is estimated at VND3,345.

·         In Q1 2023, the company has achieved 21% and 28% of the revenue and profit targets of the year, respectively. Based on MCM's business plan completion history and the 2023 positive outlook, we believe that it is able to exceed the business targets by the end of the year.