KEY HIGHLIGHTS

VNM (Vinamilk) is the leading enterprise in Vietnam dairy industry with a dominant market share of over 50% across most product segments. Its long-established position provides VNM with an advantage to continue expanding new product segments, while the company has also built a healthy asset structure (low debt, ample cash), and an attractive cash dividend policy (averaging over 40%/year/share, equivalent to a dividend yield/share of 6% per year).

In the short term, VNM is facing certain cost pressures and narrowing profit margins due to the restructuring of its distribution systems as well as the end of the favorable raw milk powder cycle (low prices in 2024). Nevertheless, VNM is effectively implementing cost of goods sold management and system improvements to enhance its margins (as reflected in the gross margin of Q2).

At the same time, the company’s policy of expanding exports and diversifying product categories is creating long-term growth drivers for VNM.

We forecast that VNM will achieve revenue and net profit after tax of VND 62,210 billion and VND 8,951 billion, respectively, equivalent to changes of +0.62% and -5% compared to 2024.

RECOMMENDATIONS

In general, after a growing cycle, VNM is implementing comprehensive solutions to optimize the position it has built over many years in the dairy industry both in the domestic and international markets. The brand repositioning campaigns and continuous changes to the distribution system demonstrate the company’s efforts and the vision of the Board of Directors. Along with that, the healthy financial structure and a high cash dividend policy are among the attractive factors for the stock.

We value VNM shares at VND 65,500 per share and recommend ACCUMULATE.