VNM – Regain market share on the success of new trade terms
- In Q3 2022, Vinamilk posted net sales and net profit of VND16,079 bn (or USD684 mn; +7.7% QoQ; -0.7% YoY) and VND2,298 bn (or USD98 mn; +10.3% QoQ; -21.4% YoY), respectively. The positive signal taken from the performance is that domestic earnings has recovered. VNM regained market share in all key products (except formula powdered milk).
- We forecast Q4/2022 net revenue and NPAT-MI to reach VND 17,625 Bn (or USD 750 Mn, +9.6% QoQ, +11.4% YoY) and VND 3,054 Bn (or USD 130 Mn, +32.9% QoQ, +39.1% YoY), respectively. Better profit margin will come from lower raw milk costs as the company closed raw material contracts at below year-ago levels.
- We maintain the target price of VND85,100. Adding a cash dividend of VND4,000, the 12-months expected return is 13.8% compared to the closing price on Nov 02nd 2022. Despite the rosy outlook that VNM ‘s organic sales will grow since Q4 2022, VNM ‘stock price rose by +14.6% from the beginning of Oct-2022, thus we downdrage from BUY to ACCUMULATE this stock
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.
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