VNM – High input costs remain an obstacle for profit margin improvement
- In Q4 2022, VNM had net revenue of VND15,069 bn (or USD647 mn; -6.3% YoY; -4.7% QoQ), of which, both of domestic and overseas channel went down. Due to strongly rising input costs, the net profit margin dropped to the lowest level (12.4%) since the last decade, equivalent to VND1,869 bn (or USD79 mn; -18.7% QoQ; -15.5% YoY).
- 2022 net sales of VNM was VND59,957 bn (or USD2,540 mn; -1.6% YoY) and NPAT of VND8,516 bn (or USD360 mn; -19.2% YoY), completing 94% and 88% revenue and profit targets respectively under rising inflation environment. 2022 results were below our expectations, thus we lowered 2023 expected sales and net profit to VND62,532 Bn (or USD2,661 mn, +4.3% YoY) and VND9,263 Bn (or USD394 mn, +8.8% YoY), respectively. The equivalent EPS comes at VND3,989 (+9.8% YoY).
- Our new target price for VNM is VND83,400, which is lower by 11% compared to the latest target price (VND93,800) on Jan-2023. Adding a cash dividend of VND3,850, the 12-months expected return is 13% compared to the closing price on Mar 15th 2023. We recommend to ACCUMULATE Vinamilk as a defensive investment with a stable cash dividend yield (~5%) and positive growth outlook
Vietnam Dairy Products Joint Stock Company (Vinamilk) is a Vietnam-based company engaged in the food processing industry. It is involved in the manufacturing, marketing and distribution of dairy products, such as milk of various forms and milk derived products, as well as confectioneries and non-alcoholic beverages. The Company also provides packaging and logistics services, along with other technical support to cultivation and breeding processes to farmers.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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