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Vietnam's laundry care market – The opportunity for domestic businesses to enter the market is low

• Similar to other FMCGs in Vietnam, the laundry care market has entered a saturation phase with single-digit growth mainly driven by fabric softeners and price factors (related to both inflation and the trend of product premiumization).
• In terms of competition, domestic businesses are "stifled" by the large positions of two multinational corporations, Unilever and P&G. These businesses are forced to look for competitive strategies to avoid collisions with these giants such as positioning low prices towards the countryside, outsourcing for Unilerver itself such as LIX, NET, taking advantage of their retail system to create priority on its display such as MSN with the NET brand, Chante'… but has not been able to expand its market share significantly over the years.
• With great challenges from the industry context and room to expand a small market share (less than 5%), both LIX and NET are no longer attractive investments when the current P/E valuation (9.7x for LIX and 9.4x for NET) is higher than the 10-year industry average of both enterprises (7.1x for LIX and 7.0x for NET).
• The point of note lies in the dividend distribution strategy, the dividend rate of the Company (over 6.0%/year) is tending to be higher than the deposit interest rate (5.0%/year) in the last 8 years. Investors who follow the dividend investment school need to monitor the consistency of this ratio in the following years to consider investing and accumulating dividends every year.