VINAMILK

FINANCIAL

FINANCIAL ANALYSIS
ANALYSIS

Prepared by GROUP 08
Japanese-style International Business
OVERVIEW
TOPIC HIGHLIGHTS
1. Company Overview

2. Industry Overview

3. Ratio Analysis

4. Income Statement Analysis

5. Recommendation

2
COMPANY
OVERVIEW

TRADE NAME ESTABLISHMENT

Vietnam Dairy Products Joint-stock 1976, headquartered in Ho Chi Minh
Company (Vinamilk) City

PRODUCTS
Liquid milk, condensed milk,
powdered milk, probiotic, yogurt, ice
cream, soft drinks
ACHIEVEMENT
Leading Dairy Company in
Vietnam
Vietnam’s Top 50 Valuable
Brands (Forbes Vietnam)
Vietnam’s Top 10 Sustainable
Businesses (2016)
Top 40 World Dairy Producers
(2021)

3
 DAIRY INDUSTRY
OVERVIEW
Weaker than foreign
Significant importance in
domestic economy 01 05 competitors in high-value
product segment

Important link to Vinamilk: majority of

agriculture 02 06 the market share

Significant growth (with

an upward trend 03 07 Modernized cow farms
forecast)

Not correspond with the

Focus on medium-scale
current consumption 04 08 household farming
demand

4
 Others
14.3%
MARKET SHARE
(2020)

Vinasoy
6.2%

Moc Chau Milk Vinamilk

2.1% 43.3%

Nutifood
6.1%

Abbott
5%

DAIRY TH True Milk

INDUSTRY 7.2%

OVERVIEW FrieslandCampina
15.8%

5
 RATIO ANALYSIS
Gross
Profit 2020

2021

Vinamilk Dutch Lady Vinamilk Dutch Lady

Margin

Gross Profit Gross Profit

Vinamilk

49.31%

46.55%

Dutch
Lady 32.44%

35.26%

Sales Sales Reason:

Vinamilk's input: mostly
imported materials
0

00

00

00
0

00

00

00

Dutch Lady's input: huge

,0

,0

,0
,0

,0

,0

00

00

00
00

00

00

,0

,0

,0
,0

,0

,0

00

00

00
00

00

00

,0

,0

,0
materials from foreign suppliers
,0

,0

,0

00

00

00
↑
00

00

00

,0

,0

,0
,0

,0

,0

20

40

60
20

40

60

►Price of raw materials

2020 2021 ►Cost of goods sold ↑
►Gross profit ↓
6
 RATIO ANALYSIS

Vinamilk Dutch Lady Vinamilk Dutch Lady

Return

On 2020

2021

Assets
Net Income Net Income

Vinamilk

24.94%

21.81%

Dutch
Lady 14.71%

35.37%

Total Assets Total Assets

Vinamilk: less capital efficiency

Dutch Lady: employ assets
0

00

00

00

00

00
0

00

00

00

00

00

more effectively than Vinamilk

,0

,0

,0

,0

,0
,0

,0

,0

,0

,0

00

00

00

00

00
00

00

00

00

00

,0

,0

,0

,0

,0
,0

,0

,0

,0

,0

00

00

00

00

00
00

00

00

00

00

,0

,0

,0

,0

,0
Reason:
,0

,0

,0

,0

,0

00

00

00

00

00
↑
00

00

00

00

00

,0

,0

,0

,0

,0
,0

,0

,0

,0

,0

10

20

30

40

50
10

20

30

40

50

►Price of imported input

2020 2021 ►Operating income ↓
►Net income ↓
7
 RATIO ANALYSIS

Vinamilk Dutch Lady Vinamilk Dutch Lady

Return

On 2020

2021

Equity
Net Income Net Income

Vinamilk

35.64%

44.04%

Dutch
Lady 32.58%

64.82%

↓
Common Equity Common Equity

Vinamilk: efficiency in using

↓
capital & resources, financial
0

00

00

00

00
0

00

00

00

00

performance
,0

,0

,0

,0
,0

,0

,0

,0

00

00

00

00
00

00

00

00

,0

,0

,0

,0
,0

,0

,0

,0

00

00

00

00
00

00

00

00

,0

,0

,0

,0
Dutch Lady: higher average
,0

,0

,0

,0

00

00

00

00
00

00

00

00

,0

,0

,0

,0
,0

,0

,0

,0

10

20

30

40
10

20

30

40

return on capital contribution

2020 2021 from owners

8
RATIO ANALYSIS

Cover well the short-term

solvency
Healthy business & can
pay its liabilities
9
RATIO ANALYSIS

Lower degree of leverage and more

financial flexibility
2021: weaker sales and possibly
excess inventory
10
 Vinamilk tried to
decrease the price
for defective goods
instead of returning
it back and fixing.

INCOME STATEMENT
ANALYSIS 11
 INCOME
STATEMENT
ANALYSIS

DR ↑ due to the
distribution system
and the recovery
of purchasing
power after Covid
19 pandemic

12
 INCOME
STATEMENT
ANALYSIS

Expand exporting
overseas
(Philippines & 2 new
markets)
13
14

↑ cost of input
materials due to
disruptions to the
global supply chain
(Covid 19) and anti-
dumping tax policies
on some imported
materials.

INCOME
STATEMENT
ANALYSIS
Unreasonable marketing
strategy: Run too much
promotional campaign
► not balance with sale
↓
► gross profit

INCOME
STATEMENT
ANALYSIS

15
 INCOME
STATEMENT
ANALYSIS

Gross profit margin

decreased as the price
of goods and freight
continued to increase

16
 Net operating profit >98% ► correct operation of business line
Negative growth of net profit ► business activities become worse

INCOME STATEMENT
ANALYSIS 17
INCOME STATEMENT
ANALYSIS

↓ profit ► ↓ equity holders

Starting from 2021, CP Vinamilk continuously lowers

prices. Vinamilk's share price fell in the context of
corporate profits also falling in 2021. 18
INCOME STATEMENT
ANALYSIS CONCLUSION
Not maintain a good growth
performance in the previous
period
Unsuitable marketing strategy
Negative growth in profit after
tax
Decrease earning per share
Improve market share compared to
2020
Have potential to develop in foreign
markets

19
RECOMMENDATION
FOR COMPANY

Reduce cost and assure quality of production

Reduce cost of raw material:
Proactively supply domestic raw materials
Import raw materials from the long term suppliers
Reduce Inventories:
Offer progressive price discounting frames according to sales
Implement a inventory management system

Reduce returns, defective goods

Strengthen risk management
Highest standards of quality management systems
Improve technology capacity

20
RECOMMENDATION
FOR COMPANY

Reduce credit rate and improve reasonable

payments to reduce unnecessary debt
Have the suitable credit sales policy for each customer
Invest in expanding modern payment methods

Effectively marketing to reduce promotional

cost
Regularly research markets, customers and competitors
Should continue focus on CSR activities

Expand invest international market

Focus investing more in international markets and

expanding in other potential markets
Hedge exchange rate risk

21
RECOMMENDATION
FOR INVESTORS

NOW IS NOT A GOOD OPPORTUNITY BUY OR

REMAIN VINAMILK'S SHARES

The stock market is down trend

Vinamilk also did not maintain a good growth
performance as in the previous period covid 19
Vinamilk does not have much growth in the next 2-3
years

22
THANK YOU!