FINANCIAL

ANALYSIS

GROUP 6

Đinh Trần Nguyệt Minh

Lê Hiền Trang
Hoàng Khánh Nhi
Dương Bích Ngọc
Nguyễn Thị Khánh Linh
Trương Ngân Hà
Trần Duy Khang
TABLE OF
CONTENTS
01 Overview

02 Analysis

03 Valuation and Recommendation

INDUSTRY
OVERVIEW
Vietnam’s Dairy Industry in 2023

Vietnam’s GDP is estimated to rise by

4.7%

Per capita milk consumption is expected to

increase by 40%
COMPANY OVERVIEW
 2021
Top 40 dairy companies with the
highest revenue in the world
2018
Top 200 best companies with revenue
over $1b in Asia Pacific
2016
Vinamilk's 40-year journey of
formation and development
2006
1st dairy farm in Tuyen Quang
1995
1st milk company in Hanoi

1976
Founded
 Vinamilk has received many awards

TOP 10 THE WORLD'S

BRANDS (6TH)
MOST VALUABLE DAIRY

TOP 5 THE WORLD'S LARGEST DAIRY BRANDS

(2ND)

TOP 30 MOST VALUABLE FOOD BRANDS (24TH)

TOP 10 LARGEST FOOD BRANDS (8TH)

Brand value increases over the years
Challenges impacting Vinamilk

Declining Domestic Consumption

• Economic difficulties causing price sensitivity
• Lower sales in popular milk segment

Increasing Competition
• Rising competitive pressure, especially in powdered milk segment

Dependence on Imported Ingredients

• Fluctuating raw milk powder prices impacting profit margins

Impact of Global Sugar Prices

• Recent surge due to adverse weather in India affecting supply
FINANCIAL ANALYSIS
YEAR-OVER-YEAR
ANALYSIS
Looking back at business results over the past 5 years, the business is facing certain
barriers in terms of growth
The sale revenue: steadily increase then slow down in 2021 due to the
1
impact of the COVID-19 pandemic. In 2022, there was a decrease
because of the rising price of inputs,.. Meanwhile, the COGS rose
faster than the sale revenue.

2
Gross profit margin decreased sharply from
2020. Beside that, in 2022, gross profit margin
decreased below 40% for the first time

Source: Vietnam Dairy Products Joint Stock Company and its subsidiaries Consolidated income statements for 5 years starting from 2018 to 2022
Reviewing the business performance over the period of 5 years reveals obstacles,
particularly concerning expenses.

Over the five-year period, there is a 5.5% upward in

3
SG&A from 2018 to 2022. Both Selling Expense and
General & Aministrative Expense peaked in 2020.

Source: Vietnam Dairy Products Joint Stock Company and its subsidiaries Consolidated income statements for 5 years starting from 2018 to 2022
Over the five years, the EBITDA and Net income increased from 2018 to 2020 and
decreased slightly in 2021. However, they fell sharply in 2022.

4
Reasons:

• Impact of the Covid-19 epidemic

• Prices of raw materials, animal feed,
shipping costs... increased due to
disruptions in the global supply chain
• In 2022, company had to face high
inflation pressure leads to a significant
decrease in consumption

Source:Vietnam Dairy Products Joint Stock Company and its subsidiaries Consolidated income statements for 5 years starting from 2018 to 2022, Markettime (2023), MekongAsean (2023)
 Revenue from sales activities of the company dropped.
Therefore, profit dropped and so does EPS.
5

Source: Vinamilk’s annual report from 2018 to 2022

6
Though ROA and ROE have been on the steady
decrease since 2018 due to rising input materials costs
but still remained high among industry competitors

Not only challenged by high raw input material costs,

Vinamilk also faces increased transportation costs due
to rising gasoline prices, thus increasing the overall cost
of sales.

Source: Vinamilk’s annual report from 2018 to 2022

 This figure shows the company's highly capable of paying off its current debts

VNM has great current assets to current

liabilities ratio. However due to the
insignificant Cash ratio, VNM may have to
consider selling some of its current assets
to pay off its debt obligations.

Source: Vinamilk’s annual report from 2018 to 2022

 VALUATION
&
RECOMMENDATION
Vinamilk’s stock code information

Vinamilk Dairy Joint Stock Company was first listed on

HoSE (Ho Chi Minh City Stock Exchange) in 2006
Stock symbol:
VNM
Production group: Manufacturing
 VALUATION
2022 2021 2020 2019 2018

EBIT (**) 10,661,573 13,011,034 13,662,354 12,904,533 12,103,063

FREE CASH
FLOW
Tax (*) 20% 20% 20% 20% 20%

VALUATION
Depreciation and
2,095,449 2,121,337 2,208,866 1,948,072 1,626,632
Amortization (*)

Capital expenditure
(**)
2,455,000 -1,531,000 -1,265,000 -2,158,000 -3,186,000
METHOD
Change in NOWC
-2,789,535 3,588,415 5,174,365 358,550 -191,708
(**)

FCF 10,959,242 10,472,749 9,229,384 14,071,148 14,686,790

(*) Vinamilk’s consolidated financial statement from 2018 - 2022 (Audited)

(**) Group’s calculation
 FREE CASH FLOW

GROWTH RATE OF THE

VALUATION FREE CASH FLOWS
VALUATION
FREE CASH FLOW
FORECAST
WACC (**) 9.86%

High growth phase with a growth rate of 13.47%

History h Forecast

Year 2022 2023 2024 2025

FCF 10,959,242 12,435,651 14,110,958 16,011,959

Present value of FCF 11,319,709 12,844,679 14,575,089

(**) Group’s calculation

h
 VALUATION
FREE CASH FLOW
FORECAST
VALUE OF FIRM:
Stable growth phase (**) -5.1% 140,159,033,705,706

Present value of Terminal value of

101,419,556,699,084
firm in 2025 (**)
VALUE OF
Number of shares outstanding (***) 2,089,955,445
SHARE:
67,063
(**) Group’s calculation
(***) Vinamilk’s consolidated financial statement of Quarter 3, 2023 (Audited)
 The leading dairy company in Vietnam, is becoming one of the Top

1 30 largest dairy companies in the world in terms of revenue. VNM

shares still hold the No. 1 position in Vietnam's dairy industry.

RECOMMENDATION
New brand identity: changed its brand identity in July 2023. This
2 can create a positive signal for Vinamilk's revenue.

The second quarter of 2023: total revenue increasing 1.6% over

3 the same period and profit after tax increasing 5.6% over the same
period.

4
The intrinsic value of the stock is VND 67,063, smaller than its
market value of VND 70,000 (value taken as of 11/12/2023)
(*****)

The company's ownership of raw materials, production lines and

5 distribution channels.

Penetrating larger, more potential markets: China and countries

6 with high room for growth: Cambodia, expected to ensure a

compound annual growth rate: 10%-12% for overseas revenue
from 2022 to 2026.

GOOD OPPORTUNITY
(*****) VietstockFinance
VINAMILK DECEMBER 2023

THANK
YOU
GROUP 6