Vinamilk Research
Company research
Troy University
VINAMILK
FIN 3332
Managerial Finance II
GROUP ASSIGNMENT
VINAMILK JOIN-STOCK COMPANY RESEARCH
Instructor: Group:
Dr. Nguyen Tung Nguyen Hong Nhung Phan Anh Tuan Le Hoang Thu Le Vu Thu Trang
26th August, 2011 FIN 332 - Troy Spring Page 1
Company research
EXECUTIVE SUMMARY
Key statistic of company:
Listing Information Status IPO date VND’ Share Price 53,000 Summary Par value 10.0 52-week high % change (down) 52-week low % change (up) Share Volume Summary Average 30 days trading volume Capitalization Book value Market capitalization Ownership State FPT BoD, BoM, Supervisory Board Staff Others Key Financial Data (FY07) Total assets (m) Total liabilities (m) Revenues (m) NPAT (m) EPS ROA ROE Joint-stock Company 19/02006 US$ 2.54 0.48 119,000 n/a 82,500 n/a Million 58,389 VNDm 3,708,255.5 44,115,877.5 4 Shares (m) 21.26 18.76 1.09 0.33 1.00 VND 146,99,418 3,376,246 10,168,388 10,830 8.73% 11.93% % 50.08 44.19 2.56 0.8 2.37 US$ US$m
VINAMILK
P/E Debt/Equity ratio Dividend yield
10.99 0.0 n/a
10.99 0.0
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Business summary
VINAMILK
Established in 1976, Vinamilk has maintained a dominant position in Vietnam’s dairy sector with over 30 years of operational history. Its traditional product is the ‘Longevity’ brand of condensed milk. Vinamilk expanded its product range by introducing powdered milk and cereal products in 1988 and launching UHT milk and yoghurt in 1991. The Group was equitized in 2003 and subsequently listed on HOSE on 19 January 2006. Throughout the years, Vinamilk has expanded its production capacity by acquisition and construction of new plants around the country. At present, the Group operates nine dairy factories with a total capacity of 504 thousand tons per year and one coffee factory with a capacity of 1,500 tons of instant coffee and 6,000 tons of roasted ground coffee.
Invest Rationale
The largest player in the domestic dairy market The Group is the largest dairy producer in Vietnam, capturing around 37.0% of the market share in the domestic dairy market. In terms of product segments, the Group accounted for nearly 85.0% of the market share in the yoghurt and condensed milk segment; and around 45.0% of the market share in the liquid milk segment in 2008. These segments jointly contributed to around 68.0% of its total revenue in 2008. Besides that, Vinamilk’s powdered milk-infant cereals segment accounted for about 29.0% of its total revenue in 2008. The management has set an ambitious target to expand the market share of this segment from 15.0% in 2008 to at least 35.0% over the next two years. Strong brand name Over the years, the Group has built a reputable brand name for its major products. Its highly-popular brand, ‘Vinamilk’, is viewed by many domestic consumers as the most trusted brand for nutritional dairy products. The Group is ranked first in ‘The Top Ten High-Quality Vietnamese Goods’ from 1995 to 2009. According to AC Nielsen, Vinamilk’s contributions in the ‘favorite brand index’ and the ‘brand-used most-often index’ have increased by 14% and 12% y-o-y, respectively, in 2008. Extensive nationwide distribution network Vinamilk has established the largest distribution network compared to its sector’s peers. The Group has 250 distributors selling its products to 125,000 retail outlets covering 64 provinces in Vietnam. This traditional distribution channel accounted for 80.0% of the Group revenue last year. Its modern distribution network through hypermarkets and supermarkets contributed to about 12.0% of the Group’s total revenue, while the remaining 8.0% of its revenue comes from hotels, restaurants, and cafeterias (Horace). Besides that, Vinamilk has consistently been reaching out to assist its distributors in order to strengthen its foothold. The Group has invested in 7,000 fridges, coolers for chilled products and 300 mini-vans to support distributors last year. In 2009, the management plans to invest more than VND 127.0bn in vans and refrigerators to support its distributors and outlets. We believe that such an extensive distribution channel will continue to give Vinamilk a competitive edge against its foreign and domestic peers. The wide market reach also serves as the biggest barrier for its competitors to enter and/or expand their market share in this market. Continuously expanding product offerings The Group has continuously launched new product offerings to meet the increasingly diversified demand of consumers. In 2008, the Group has developed more than 40 new products and successfully FIN 332 - Troy Spring Page 3
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VINAMILK
introduced 12 new products to domestic and overseas markets. These include “Probi” yogurt, which help people to enhance the absorption of underlying nutrients and ‘Dielac Diecerna’ for diabetes consumers. The management plans to re-categories its product range tailored for specific consumer classes such as pregnant women, infant, children, teenagers, and elderly. This is expected to help the target consumer group to easily recognize the benefits of the products.
Catalysts for upside potential
Rising demand Rapid urbanization has boosted domestic demand for dairy products. We expect improved living standards and rising health awareness to encourage the consumption of dairy products going forward. Although domestic per capita fresh milk consumption has increased from 3.8kg in 2001 to around 9.0kg in 2008, it remains substantially below the fresh milk consumption per capita in the regional market such as Thailand (25kg) and Singapore (33kg), thus implying favorable growth potential. Upbeat growth prospect According to Agroinfo, Vietnam has the highest retail price of milk in the world. The persistently high consumer milk price, coupled with the robust domestic consumption, has enabled the dairy market to grow exponentially over the past five years. Vietnam’s dairy market has been accredited as the ‘rapid growing sector’ given that it has registered a respectable growth of 15.2% per annum from 1996-2006, only lagging behind the 16.0% annual growth rate registered by China’s dairy market. Among the dairy products, we foresee that powdered milk and fresh milk segments could experience the highest growth rate going forward, given their increased popularity among the domestic consumers and the low market penetration rate. Ambitious target to fulfill the domestic supply gap of milk inputs Domestic dairy producers continue to rely heavily on imported milk inputs. At the end of 2008, Vietnam had 107,983 dairy cattle producing about 262,160 tons of fresh milk input, supplying less than 22% of the milk inputs for domestic production. To reduce the country’s dependency on the imported dairy milk inputs, the authority has set an ambitious target to increase the number of dairy cattle that could fulfill around 40.0% of the domestic demand for fresh milk inputs by 2010. We believe that Vinamilk, being the largest fresh milk purchaser in Vietnam, could benefit enormously from this government measure.
Risks and Safeguards
Price volatility of imported milk input As mentioned before, the Group is highly dependent on imported milk inputs. We understand that milk inputs account for more than 75.0% of the Group’s raw materials cost and 60.0% of its cost of goods sold (COGS). Our sensitive analysis shows that every 10.0%-increase in milk input price will translate into a 22.4%-decline in the EPS, assuming that the ASP of its major product remains constant. Nonetheless, we believe that the active cost control policies engaged by the management will minimize the Group’s exposure to the external volatility of the global milk input prices. Furthermore, the ability of the Group to pass on its increased cost to end-users will mitigate the risk of margin erosion, in our opinion. Rising cost components The Government has approved the hike of the electricity rate by 9.0% as of 1 March 2009, which is expected to increase the Group’s total cost by 1.0%. Furthermore, we expect the Group to incur higher
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VINAMILK
marketing expenses going forward to strengthen its market position. Again, the ability of the Group to pass on its increased cost to end-users will mitigate the risk of margin erosion, in our opinion. Competition of high-end product segment to intensify Domestic dairy manufacturers have faced intensified competition from foreign players such as Dutch Lady, Abbott, Meat Johnson and Nestlé. We observe that Vietnamese consumers, particularly the young and affluent people, may prefer the popular foreign brands to domestic brands. Despite the intensified competition, we believe that the Group is able to maintain its dominant position in the market given its popular brand name, extensive distribution network and aggressive marketing campaign. Furthermore, we observe that the challenging economic environment has led to a down trading consumption pattern that favor’s the competitive priced products distributed by Vinamilk. Regulatory risk Given that majority of the Vinamilk’s products serve as essential goods for its consumer, we do not discount the possibility that the Government may restrict the Group’s ability to raise its retail price should the inflation become a concern to the economy.
Peer Comparison
Market Information
Product overview
VNM has a wide range of products including various kinds of milk such as: fresh milk, yoghurt, powdered milk, ice cream and beverage (juice, tea…). Previously there were some kinds of coffee products but they are stopped producing now.
Market overview
Vietnam’s boasts incomparable demographics. It has a large population of 84 million people and more than half of them under the age of 25. Furthermore the country is urbanising rapidly and an urban wealthier population is strongly corelated with a higher per capita dairy consumption. Given that existing per capita consumption is currently very low we believe that annual double digit growth is
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virtually built-in to the market. Currently the market is relatively immature but it is certainly large enough. Dairy products consumption CAGR in Vietnam was 16.3% between 2004 and 2006, well above the regional average of 13 - 14%. Going forward, we expect growth to be sustained at above average regional growth rates of around 14.5%. The main drivers would be higher per-capita consumption, in line with strong GDP growth. Vietnam’s GDP grew by 8.17% in 2006, the second highest in ten years. The Economist Intelligence Unit forecasts that Vietnamese GDP growth will moderate to 7.5% by 2010. Vietnamese currently consume around 9 kg of dairy products per capita annually, which is well below the global and region averages for per-capita consumption. However this is increasing due to five key drivers.
These are population growth; favourable demographics; strong income growth; urbanisation; and lifestyle changes. Combined with these drivers are; (1) a change in people’s eating habits away from traditional foods; and (2) an increase in the consumption of dairy products, due to greater consumer awareness of the perceived nutritional and health benefits of eating more dairy products. This is especially true for younger consumers.
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TABLE OF CONTENTS
VINAMILK
EXECUTIVE SUMMARY ............................................................................................................................. 2 Key statistic of company: ..................................................................................................................... 2 Business summary ............................................................................................................................... 3 Invest Rationale ................................................................................................................................... 3 Catalysts for upside potential .............................................................................................................. 4 Risks and Safeguards ........................................................................................................................... 4 Peer Comparison ................................................................................................................................. 5 Market Information ................................................................................................................................. 5 Product overview ................................................................................................................................ 5 Market overview ................................................................................................................................. 5 COPORATE INFORMATION....................................................................................................................... 8 Company History: ................................................................................................................................ 8 Business Discription: ............................................................................................................................ 9 Business overview: .............................................................................................................................. 9 Business Stratergy: ............................................................................................................................ 11 RELATED PARTIES .............................................................................................................................. 12 FINANCIAL STATEMENT ANALYSIS ......................................................................................................... 14 Operating Results .............................................................................................................................. 14 Cash flow........................................................................................................................................... 17 PEER COMPARISONS ............................................................................................................................. 18 Peer Comparisons:............................................................................................................................. 18 SWOT ANALYSIS .................................................................................................................................... 18 Strength (S) ....................................................................................................................................... 19 Weaknesses:...................................................................................................................................... 20 Opportunities (O) .............................................................................................................................. 20 Threats (T) ......................................................................................................................................... 21 APPENDIX .............................................................................................................................................. 22 Key Ratio ........................................................................................................................................... 22 Balance Sheet .................................................................................................................................... 23 Income Statement ............................................................................................................................. 24
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VINAMILK
COPORATE INFORMATION
Company History:
1976 : Company was founded under the name of Southern Coffee-Dairy Company, a subsidiary of the General Food Directorate and had six factories in operation, namely Thong Nhat Dairy Factory, Truong Tho Dairy xdscxsedsFactory, Dielac Factory, Bien Hoa Coffee Factory, Bich Chi Powder Factory and Lubico. 1978 : The management of Company was transferred to the Ministry of Food Industry and Company was renamed United Enterprises of Milk Coffee Cookies and Candies I. 1988 : Introduced powdered milk and cereal with milk powder at the first time in Vietnam. 1991 : Launched UHT milk and spoon yoghurt to Vietnam market. 1992 : The United Enterprises of Milk Coffee Cookies and Candies I was formally renamed Vietnam Dairy Company and came under the direct management of the Ministry of Light Industry. Started focusing on the manufacturing and processing of dairy products. 1994 : Hanoi Dairy Factory was built in Hanoi as part of Company’s expansion and market development strategy to cater to the market in the northern region of Vietnam. 1996 : Binh Dinh Dairy Joint Venture Enterprise was founded as the result of our joint venture with Dong Lanh Quy Nhon Joint Stock Company. This joint venture enabled our Company to successfully gain access to the market in the middle region of Vietnam. 2000 : Can Tho Dairy Factory, which is located in Tra Noc Industrial Zone, Can Tho City was built to better meet the demands of consumers in the Mekong Delta. In the same year, we set up the Logistics and Warehouse Enterprise located in 32 Dang Van Bi St., Ho Chi Minh City. 2003 : Was formally converted into a joint stock company in December 2003 and changed its name to Vietnam Dairy Products Joint Stock Company to reflect its change in status. 2004 : Acquired Saigon Milk Joint Stock Company. Increased share capital to VND 1,590 billion 2005 : Bought over our joint venture partner’s remaining shareholdings in Binh Dinh Dairy Products Company Ltd (as Binh Dinh Dairy Factory was then known) and inaugurated Nghe An Dairy Factory, located in Cua Lo Industrial Zone, Nghe An province, on 30 June 2005. * Entered into a joint venture agreement with SABMiller Asia B.V. and established SABMiller Vietnam Joint Venture Company Ltd. in August 2005. Our first joint venture product, Zorok, was also launched in the first half of 2007. 2006 : Vinamilk was listed on the HOSE on 19 January 2006 with the SCIC holding approximately 50.01% of our Company’s shareholdings. FIN 332 - Troy Spring Page 8
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* Opened An Khang Clinic in Ho Chi Minh City in June 2006. This is the first clinic in Vietnam managed by a sophisticated electronic management system. The clinic offers a diverse range of services such as nutritional consulting, gynecology testing, pediatrics consulting and health screening. * Commenced our dairy cow farms program with the acquisition of Tuyen Quang dairy farm, a small scale farm with 1,400 heads of cows in November 2006. The Tuyen Quang dairy farm was operational at the time of acquisition. 2007 : Acquired a 55% interest in Lam Son Milk Company Ltd. in September 2007, located in Le Mon Industrial Zone, Thanh Hoa province. 2008: Tien Son Dairy Factory was inaugurated and put into operation in Hanoi. 2010: Acquired 100% shares from F&N Vietnam Limited and changed its name to Dielac Dairy One Member Co., Ltd. Invested NZD12.5 million, equivalent to 19.3% of share capital in Miraka Limited in New Zealand. Acquired the remaining shares of Lamson Milk Joint Stock Company and changed its name to Lam Son Dairy One Member Co., Ltd. Inaugurated and put the Beverage Factory into operation in Binh Duong.
Business Discription:
Vinamilk wish to be the most favourite product in all areas, territories. Therefore, we meditate that quality and creation is the companion of Vinamilk. Vinamilk considers customers our focus and commit to meet all demands of customers. Always satisfy customers with high-quality, safe, and diverse products, the best service and competitive prices. Vinamilk will be the fastest and sustainable growing healthy dairy and food company by building a long-term competitive advantaged product portfolio across the scale.
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Business overview:
In the year 2009, Vinamilk continues to be a leader in the dairy market in Vietnam. Over time, products of Vinamilk have obtained growing trust and become a favorite brand of consumers. All the lines of products have experienced an exceptional and sustainable growth. Total sales reached an increase of 29.3%, of which local sales seen a growth of 34.6%. The distribution network has been strongly reinforced and developed. The company has reached targets of both sales volumes and profits set out by the Shareholder’s Meeting at the beginning of the year. The broad range of Vinamilk’s dairy products is divided into the 6 groups, in which, four first groups are the key products lines, contributing over 95% to the total sales of the Company. • Group of powdered milk and infant cereals • Group of condensed milk • Group of liquid milk • Group of yogurt, ice-cream and cheeses • Group of fruit juice, soy-bean milk, purified water • Group of Vinamilk coffee FIN 332 - Troy Spring Page 9
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VINAMILK
Powdered milk and infant cereals This group is consumed at both local market and for exports. These are the key products of Vinamilk for export to the Middle East. Sales from these products make a contribution of 20% to local sales of the Company and experienced a growth of 32.5% in comparison with those in 2008. This market segment of Vinamilk is under the severe competition with the imported products of international brands as well as from the other local competitors. The potential for growth of this product range is great and in the coming years, this will be the ongoing emphasis of Vinamilk’s development strategy. Condensed milk Condensed milk is a traditional product of Vinamilk, which was firstly launched in 1976. In the year 2009, sales from condensed milk products have contributed 25% to the local sales of Vinamilk and increased 13.3% incomparison with those in 2008 though its proportionin the Company’s product structure has been graduallydecreased upon the development strategy of Vinamilk.Majority of condensed milk products are consumed inVietnam and a small part is exported to Cambodia andthe Philippines. Liquid milk Liquid milk includes UHT fresh milk and drinking yogurt. This segment of products is the biggest sales contributor to the local sales of Vinamilk with the contribution of 34.6% and sales from these products also grew at the rate of 47.8% as compared with those in 2008. All the liquid milk products are consumed in Vietnam’s market. The competition in the market segment of liquid milk is highly intensive since there are many other local involving players, not mention to some UHT milk product brands imported. In the coming years, liquid milk remains the focus in Vinamilk’s strategy for development. Yoghurt, ice-cream and cheeses The key product of this group is spoon yogurt. The sales from this group account for 17.2% of Vinamilk’s local product sales and have seen a growth of 51.7% as compared with those of the year 2008. Vinamilk has remained its dominant position in this market segment. It is our view that the perspective for the development of this product range in the future is still great. Fruit juice, soy-bean milk, purified water The sales of this group are mostly from fruit juice and soy-bean milk products. At the end of the year 2009, the company has launched successfully the line of non-gas beverage products, which are better for health, including marrow squash, orange smoothie, strawberry smoothie. Although this group of products makes a small portion in the company’s total revenues but it offers a great and strong potential for the company’s development in the coming time.
Sources: Vinamilk Corporation 2010 annual report, Vinamilk Corporation website.
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Business Stratergy:
Mission -
VINAMILK
Vinamilk commits to bring the communities the best-quality nutrition source that conveys out respectability, love and responsibilities for the people, life and society.
Strategy / Business Plan 2010 The company’s ultimate goal is to maximize the values to shareholders and to keep up with strategy for business development basing on following key factors: • Reinforcing and developing a system of powerful brands to satisfy the demand and consumption trends of Vietnamese consumers. • Developing Vinamilk to the most reliable and trusted brand on nutrition products and scientific credibility by application of scientific researches on specific demands of Vietnamese on nutrition in order to develop and launch the best products to Vietnamese consumers. • Making more investment into expanding its business and market of healthy beverage products through the core brand of Vfresh to meet the increasing demands for healthy and natural beverages. • Strengthening its distribution quality and network coverage to expand its market share in the market where Vinamilk’s segment is not high, especially in rural area and small towns. • Exploring the power and reliability of Vinamilk as “most reliable and trusted brand on nutrition products and scientific credibility to the Vietnamese” in order to take up at least 35% of powdered milk market segment in the next 2 years. • Developing comprehensively the portfolio of dairy products, targeting the extensive quantity of various consumers and expanding value-added products with high selling prices in order to increase the company’s profitability. • Continuing improvement of the supply network management capacity. • Keeping expansion and development of a stable, active and effective distribution network. • Developing material sources to ensure a stable fresh milk supply with high and reliable quality and competitive prices. Long-term »» Strengthening and expanding its marketing and distribution network: to open more outlets, to enhance its market penetration and invest more for selling equipment;
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»» Upgrading the entire current plants and building new production plants with international technology to improve the production capacity to meet the market demand; »» Investing and developing cow farms locally and overseas; »» Investing in R&D to introduce higher value-added products to consumers; »» Committing to consumers with the best quality products by applying ultimate standards of such quality management systems as ISO, HACCP; »» Improving the corporate governance and risk management to minimize losses to the Company and its shareholders; »» Growing the business in harmony with promoting environmental friendliness and social responsibility. With the above strategy, Vinamilk aims to achieve the sales target of USD 1 billion. Competition The dairy market in Vietnam is highly competitive. Besides the local competitors, Vinamilk has to compete with the imported powdered milk products. However, in August 2009, the Vietnam’s Politburo launched the campaign of “Vietnamese people use Vietnamese goods”. Under this campaign, the dairy products are the goods that receive the highest priority and this has contributed to reinforce the competitive capacity of the local dairy producers and Vinamilk is the one.
RELATED PARTIES
Shareholder structure 2010 (%) State Capital (SCIC) Investment Corporation 47.30 46.00 6.70 100.00 2009 (%) 47.64 44.11 8.25 100
Foreign shareholders Local shareholders (excluding SCIC)
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Board of Directors/Management Name Mrs.Mai Kieu Lien Position Chairwoman General Director Thu Vice Chairman Excutive Director Finance Profile -
VINAMILK
Bachelor of science degree, Mosco University of Meat & Milk Processing Technology, Russia Finance-Accounting University of Ho Chi Minh City, majoring in accounting and finance in 1984 Master of Business Administration degree Master of Business Administration degree
Mrs.Ngo Trang
Thi
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Mr.Hoang Nguyen Member of Management Hoc Board Mr.Le Anh Minh Member of Management Board -
Bachelor of Administration and Economics from Vietnam’s University of Banking - Master of Business Administration from Wharton Business School, University of Pennsylvania USA Mr.Wang Eng Chin Member of Management - Bachelor of Business Administration and Board Master of Business Administration from University of Mississippi, USA Mrs.Nguyen Thi Excutive Director Supply - Bachelor degree in Milk Processing Thanh Hoa Chain Technology, Moscow University of Meat & Milk Processing Technology Mrs.Nguyen Thi Nhu Excutive Director Raw - Bachelor degree in business Administration, Ho Hang Materials Development Chi Minh City University of Economics. Mr.Tran Minh Van Excutive Director Project - Bachelor degree in engineering, Ho Chi Minh City Polytechnic University. - Bachelor in Business Administration from Ho Chi Minh City University of Economics - Bachelor of Law with major in commercial laws from Ha Noi University of Laws - Master in Business Administration from Ho Chi Minh City University of Economics Mr.Nguyen Quoc Acting Excutive Director - Bachelor in Business Administration Khanh Production and R&D from Ho Chi Minh City University of Economics - Bachelor of English from Ho Chi Minh City University of Social Science and Humanism Ms.Nguyen Huu Ngoc Acting Excutive Director Tran Marketing Mr.Pham Phu Tuan Acting Excutive Director Sales Graduated from Ho Chi Minh City University of Foreign Trade. Graduated from Ho Chi Minh University of Finance and Accounting Master degree in Business Administration from Texas University in Dallas
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VINAMILK
Almost all members of the management team have graduated overseas with solid background in business management.
Sources: Vinamilk Corporation 2010 annual report, Vinamilk Corporation website.
FINANCIAL STATEMENT ANALYSIS
Operating Results
Q2/2010 REVENUE Deduction NET REVENUE Revenue growth rate COST OF GOOD SOLD % of revenue GROSS PROFIT/ (LOSSES) Gross margin Financial income Financial expenses Selling/G&A expenses % of revenue Selling expenses % of revenue G&A expenses % of revenue OPERATING (LOSSES) % of revenue Other income FIN 332 - Troy Spring PROFIT/ 1,033,520 26% 73,310 1,235,406 23% 71,618 Page 14 (2,639,523) 66% 1,363,909 34% 123,233 (38,541) (415,081) 10% (333,139) 8% (81,942) 2% 4,084,308 (80,876) 4,003,432 Q2/2011 5,581,368 (117,544) 5,463,824 36% (3,769,943) 69% 1,693,881 31% 198,133 (130,663) (525,925) 13% (418,830) 10% (107,095) 3%
Company research
Other expenses Other profit NET PROFIT BEFORE TAX Income tax Income tax rate NET PROFIT AFTER TAX % of revenue NPAT growth rate NPAT margin EPS EPS growth Revenue Revenue mix: In 2009, watery milk contributes 35% of the company’s revenue. While condensed milk has second largest contribution of 25%. Condensed milk had been the first one since the foundation of the company. Therefore, we can see that the company now focuses more on watery milk. Milk powder, yogurt and other products in turn takes 20%, 17% and 3%. 23% 2,637 (22,404) 50,906 1,084,426 (154,661) 14% 929,765 23%
VINAMILK
(12,800) 58,818 1,294,224 (201,013) 16% 1,093,211 20% 18% 20% 3,054 16%
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Revenue growth: Vinamilk has an impressive growth rate of 36% in a year (from Q2/2010 to Q2/2011). Revenue from milk powder raise rapidly from 2006 (approximately 400 billion VND) to 2009 (approximately 2.800 billion VND) Revenue from yogurt also has a dramatic increase from 600 billion VND (2006) to 3.000 billion VND (2009). Having 97% of market share. The raise in milk’s price also made Vinamilk’s revenue to increase. Therefore, the company’s profit only grew 18% (profit is compared between Q2/2010-Q2/2011).
Profitability COGS increases from 66% in Q2/2010 to 69% in Q2/2011. Selling, General and Administrative expense in total also raise by 3% in Q2/2011 (from 10% to 13%) Page 15
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VINAMILK
However, Vinamilk is still able to have 18% raise in NPAT compare to Q2/2010. EPS has a 16% growth compare to Q2/2010. Balance sheet (Million VNĐ) Q2/2010 5,804,398 234,843 2,092,260 1,119,075 2,272,650 85,570 4,949,909 24 3,058,038 2,278,666 126,013 653,359 73,329 1,659,632 158,886 10,754,307 Q2/2011 9,449,801 182,307 3,129,070 2,024,139 3,982,755 131,530 5,288,725 10 3,432,986 2,663,847 210,999 558,140 73,801 1,625,410 96,518 14,678,526
CURRENT ASSETS Cash and cash equivalent Short-term investment Short-term receivable Inventory Other current assets NON-CURRENT ASSETS Long-term receiable Fix asset - Tangible fixed assets - Intangible fixed assets - Construction in progress Investment in real estate Financial long-term investment Other non-current assets TOTAL ASSETS:
LIABILITIES Short-term liabilities Long-term liabilities OWNER'S EQUITY
2,803,351 2,643,647 159,704 7,950,956
3,391,844 3,248,164 143,680 11,286,682
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Owner's investment Share premium Treasury stock Investment and development fund Reserve fund Undistributed earnings (after tax) TOTAL LIABILITIES AND EQUITY Total asset growth Current Ratio (x) ROA ROE 2.20 8.65% 11.69% 3,530,721 (669) 2,172,291 353,072 1,895,541 10,754,307
VINAMILK
3,708,256 1,276,994 (1,054) 2,468,174 370,825 3,463,487 14,678,526 36.49% 2.91 7.45% 9.69%
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In Q2/2011, cash and cash equivalent is 182.307 million VND, takes 1.24% total assets of the company. Current ratio increases significantly from 2.20 (Q2/2010) to 2.91 (Q2/2011). The raise is mainly because of high current assets of Vinamilk. Vinamilk’s ROA and ROE is not very high and lower than that of Q2/2010. The reason is Vinamilk is using money to invest in a milk factory in New Zealand. The factory has just been opened this month. Total asset growth rate is 36.29%, it is a good growth for a big company like Vinamilk.
Cash flow
According to the statement of cash flow in Q2/2011, the ending balance of Cash and Cash equivalent is 452,083,174,487 VND. It has a growth rate of 147.97% (compare to Q2/2010). The dramatically raise in cash-flow comes from impressive operating results.
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PEER COMPARISONS
Peer Comparisons:
Vinamilk Corporation Produce and distribute condensed milk, powdered milk, fresh milk, soya milk, yogurts, icecream, cheese, fruit juice, coffee and other products derived from milk. Vietnam 2115 SCIC (47.6) Foreign shareholders (46) Local shareholders (6.7) 175,275,670 10,773 21,349.4 9.3% Dutch Lady Bhd The manufacture and/or distribution of sweetened condensed milk, milk powder, dairy products and fruit juice drinks in the home market and for export. Malaysia 213 Nestle Bhd
VINAMILK
Main activities
Stock Exchange Market cap Current ownership structure Number of shares outstanding Total assets Revenues Net profit margin Debt/Equity ratio EPS ROA ROE P/E P/B -
US$ m
Provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night. Malaysia 1579
Meiji Dairies Corporation The Group's principal activities are the manufacture, processing and marketing of milk products such as ice cream, cheese, butter, ... Japan 1,640
%
n/a
n/a
n/a
2010 VND b VND b 2011F % 2011F 2011F% 2011F% 2011F% 2011F % 2011F %
n/a 8,482 10,613.8 9% 0.56% 20.0% 19.5% 15% 30.1% 6.0
n/a 9,302 29,485.1 n/a 2.5% 5.0% 16.3% 27% 36.5% 9.1
n/a 11,029 18,495.3 n/a 1.4% n/a 18.8% 29% 15.7% 1.7
0.1%
15.9% 16.7% 45% 29.8% 8.3
There’s no main competitors with Vinamilk Corporation in Vienam, but still have some companies can compare in some fields. Vinamilk has the highest ROE.
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VINAMILK
SWOT ANALYSIS
Strength (S)
Vinamilk is undoubtedly a familiar and trusted brand in the mind of Vietnamese consumers during the last 34 years, account for 80% market shares in 2008. VNM is the biggest milk. Established since 1976, Vinamilk has grown strongly and become the leading business of the industry of milk processing. Obviously, its long history is the first and foremost strength to make it become the biggest dairy producer in Vietnam. Throughout more than 30 years’ operating, Vinamilk has become a familiar trademark to domestics’ clients. Also, Vinamilk has gained a great customer understanding and satisfaction as well as knowledge of the local market. Vietnam is a potential market for milk field with high population growth rate, and children account for more than 36%. Vietnam’s economic is developing more and faster, so people take care much more about their health; their demand in using milk is higher. Production are various and at high quality, price is lower than others production which are imported. In there, Yogurt and Fresh milk are two biggest production lines which account for the large part of VNM’s market share. In addition, VNM is also improving the new production, which Vinamilk Sliming Milk. When the Fat rate is increasing fast, demanding of lost weight is more urgent, this new production line of VNM will be accepted by a large of Vietnamese people. Besides, VNM owns many other production lines, such as Drinking Yogurt, Cheese, Ice-Cream, Condensed milk, etc. Another remarkable factor that has actually strengthened Vinamilk’s leading position in the market is that it already holds a strong distribution presence which spreads nationwide, from urban to rural, coastal and mountainous areas. The distribution network is the decisive factor for the success of a consumer goods producer. Vinamilk is now operating agencies at grassroots levels like villages in rural areas, and almost all shops on the main streets of major cities sell Vinamilk products. In addition to the strong domestic distribution with the network of 183 agencies spreading over 64/64 provinces, cities, and Vinamilk products are exported to United States and many European countries as well as area of Middle-East and Southeast Asia. Owning the advanced production line. Along with the solid distribution network, technology capability is another key to success making Vinamilk a top business of the Vietnam milk industry branch. Vinamilk has ceaselessly renovated its technology, invested in modern production lines, improved administrative and products quality so as to meet increasingly high demands from customers. Vinamilk, the market leader in Vietnam for production of dairy products, has placed an order with GEA Process Engineering for the delivery of two complete dairy processing lines for production of infant formula. The order of more than 30 million euro marks Vinamilk’s biggest single investment in dairy processing equipment. For the time being, VINAMILK possesses the most modern production lines in Vietnam which ensure the quality and hygiene. Additionally, Vinamilk also takes advantages of technical support from other firms to
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improve administration. Last year, it signed an Enterprise Agreement (EA) with Microsoft in Vietnam The marketing and advertising policies are suitable. VNM’s advertisement is very interest with funny images and sounds. Their symbol is lovely milch cows, which are loved much by almost children. Moreover, VNM has a really good marketing policy. They take care of another part – the poor children, who have no ability to buy their goods, byraising funds for charity. For example, Scholarship Fund for poor children; 1 million milk glass for poor children, etc. By the way, they had not only built their prestige butalso increased their revenue also by sharing with unlucky people.
Weaknesses:
Materials accounting for percentage of 60% - 70% product price should the price increase. Currently, buying fresh milk from households provided about 25% of raw materials for the company left most is imported. Risks associated with raw materials, the company may face risks of exchange rate. Just focus on domestic market and the marketing policy focus mainly on the South of Vietnam. VNM just export productions to some countries with very low rate (the main one is Iraq) Have no high-class production line. Therefore, a few of customers, who have high demand, will buy imported productions from other bigger countries. So, VNM lost an amount of the potential customers, which can increase their revenue much. High percentage of government ownership (> 50%) making the stock less attractive to investors.
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Opportunities (O)
Domestic per capita milk consumption is now just 10 kg, expected to grow into 12 by 2010, and 80 million populations with increasing income suggest the increasing in demand for dairy products in the next few years. Supply of raw materials are quite stable in the future, Vietnam Dairy milk will gradually decrease the proportion of imported raw materials, instead of cow'smilk fresh source material, ensuring quality dairy products for consumers and contribute to promoting the domestic industry support. These factors have a positive impact to production and business operations of the company. New business directions in beer production and real estate and other investments (in VF1, Vegetable Oil Parking JSC, BienHoa Sugar etc) are estimated promising and beneficial. Strategy of Vertical Integration by strengthened investment in local dairy farms construction (>US$10mn) can reduce milk input imports to less than 60% by 2010 (75% actually) Widen market to other countries after Vietnam became a member of WTO
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Threats (T)
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VINAMILK
Competition in almost product lines by big competitors as Dutch Lady, NutiFood, Nestlé VN… The domestic economic is unstable, high inflation rate will raise the material prices and raise cost of goods also. There are more competitors after join to WTO The main exported market is Iraq, (account for 82% revenue), but it is not stable, so if breakdowns occur VNM will meet troubles.
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APPENDIX
Key Ratio
FY 2003 Liquidity Ratio Current Ratio Quick Ratio Management Efficiency Inventory Turnover Receivable Turnover Asset Turnover Fixed Asset Turnover EBIT EBIT/Total Asset Market Value Number of shares in market Book Value EPS EPS Growth rate Profitability Gross Margin Gross Margin Before Tax Gross Margin After Tax ROA ROE 29.22% 18.27% 12.43% 2.13% 3.60% 25.09% 12.87% 12.25% 20.26% 28.52% 22.33% 9.93% 9.98% 14.44% 26.12% 24.27% 11.10% 11.05% 20.27% 27.40% 27.26% 14.37% 14.49% 17.76% 22.81% 31.65% 16.71% 15.23% 20.95% 26.79% 36.54% 25.73% 22.38% 28.01% 36.80% 2.199 3.043 3.056 3.365 1.522 2.01 2.541 3.583 3.399 4.802 3.278 4.327 3.265 5.225 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
0.533 0.560 0.172 1.996 82,564 3%
4.068 23.640 1.655 10.082 552,405 22%
4.050 7.532 1.447 7.445 569,863 15%
5.190 12.937 1.834 6.175 734,470 20%
2.896 10.154 1.225 4.037 955,381 18%
3.161 12.700 1.376 4.238 1,371,313 23%
5.134 14.567 1.251 4.204 2731358 32%
150,998,962 10,335 372
157,922,672 11,493 3,278 782%
159,000,000 13,551 3,539 8%
159,000,000 16,792 4,601 30%
175,275,700 24,101 5,497 19%
175,275,700 26,619 7,132 30%
351,265,300 18,378 6,763 -5%
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Balance Sheet
% of Total Assets FY 2009 FY 2010 5,804,397,860,378 234,843,207,079 2,092,259,762,292 1,119,075,135,003 2,272,650,052,063 85,569,703,941 4,949,906,765,951 23,624,963 3,058,038,713,598 2,278,666,157,863 126,013,324,335 653,359,231,400 73,328,395,211 1,659,632,386,999 158,885,645,450 10,754,306,626,329 FY 2009 5.99% 4.93% 27.45% 8.94% 15.19% 3.40% 40.09% 0.10% 27.56% 19.60% 0.28% 7.68% 0.00% 9.50% 2.93% 100.00% FY 2010 53.97% 2.18% 19.46% 10.41% 21.13% 0.80% 46.03% 0.00% 28.44% 21.19% 1.17% 6.08% 0.68% 15.43% 1.48% 100.00%
CURRENT ASSETS Cash and cash equivalent Short-term investment Short-term receivable Inventory Other current assets NON-CURRENT ASSETS Long-term receiable Fix asset - Tangible fixed assets - Intangible fixed assets - Construction in progress Investment in real estate Financial long-term investment Other non-current assets TOTAL ASSETS:
5,050,274,123,753 415,417,916,497 2,314,253,566,692 753,498,136,776 1,280,773,657,392 286,330,846,396 3,379,906,340,869 8,822,112,758 2,322,962,709,746 1,652,108,063,492 23,390,560,883 647,464,085,371 801,180,628,831 246,940,889,534 8,430,180,464,622
LIABILITIES Short-term liabilities Long-term liabilities OWNER'S EQUITY Owner's investment
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1,967,829,451,949 1,711,593,056,787 256,236,395,162 6,462,351,012,673 3,512,653,000,000
2,803,350,338,459 2,643,646,520,653 159,703,817,806 7,950,956,287,870 3,530,721,200,000
23.34% 20.30% 3.04% 76.66% 41.67%
26.07% 24.58% 1.49% 73.93% 32.83%
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Treasury stock Investment and development fund Reserve fund Undistributed earnings (after tax) TOTAL LIABILITIES AND EQUITY
(154,222,000) 1,756,282,910,335 294,347,876,431 899,221,447,907 8,430,180,464,622 (669,051,000) 2,172,290,789,865 353,072,120,000 1,895,541,229,005 10,754,306,626,329
VINAMILK
0.00% 20.83% 3.49% 10.67% 100.00% -0.01% 20.20% 3.28% 17.63% 100.00%
Income Statement
% of Total Net Revenue FY 2009 Net Revenue Sales Deduction Cost of good sold Gross Profit Earnings from Financial Activities Selling Expenses General and Adminitrative Expense Financial Expenses Other Income Earnings Before Taxes Taxes Net Income EPS 10,856,364,113,495 (206,370,629,645) (6,777,573,637,378) 3,872,419,846,472 435,650,789,236 (1,245,476,021,840) (279,959,615,835) (187,163,859,556) 137,093,220,509 2,732,564,358,986 351,419,086,078 2,381,145,272,908 6.785 FY 2010 16,173,754,854,110 (328,600,184,161) (10,676,719,801,966) 5,168,434,867,983 447,982,910,578 (1,438,185,805,872) (370,492,890,936) (186,706,228,159) 610,517,546,817 4,231,550,400,411 635,714,485,637 3,595,835,914,774 10.193 FY 2009
100.00% -1.90% -62.43% 35.67% 4.01% -11.47% -2.58% -1.72% 1.26% 25.17% 3.24% 21.93%
FY 2010
100.00% -2.03% -66.01% 31.96% 2.77% -8.89% -2.29% -1.15% 3.77% 26.16% 3.93% 22.23%
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Troy University
VINAMILK
FIN 3332
Managerial Finance II
GROUP ASSIGNMENT
VINAMILK JOIN-STOCK COMPANY RESEARCH
Instructor: Group:
Dr. Nguyen Tung Nguyen Hong Nhung Phan Anh Tuan Le Hoang Thu Le Vu Thu Trang
26th August, 2011 FIN 332 - Troy Spring Page 1
Company research
EXECUTIVE SUMMARY
Key statistic of company:
Listing Information Status IPO date VND’ Share Price 53,000 Summary Par value 10.0 52-week high % change (down) 52-week low % change (up) Share Volume Summary Average 30 days trading volume Capitalization Book value Market capitalization Ownership State FPT BoD, BoM, Supervisory Board Staff Others Key Financial Data (FY07) Total assets (m) Total liabilities (m) Revenues (m) NPAT (m) EPS ROA ROE Joint-stock Company 19/02006 US$ 2.54 0.48 119,000 n/a 82,500 n/a Million 58,389 VNDm 3,708,255.5 44,115,877.5 4 Shares (m) 21.26 18.76 1.09 0.33 1.00 VND 146,99,418 3,376,246 10,168,388 10,830 8.73% 11.93% % 50.08 44.19 2.56 0.8 2.37 US$ US$m
VINAMILK
P/E Debt/Equity ratio Dividend yield
10.99 0.0 n/a
10.99 0.0
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Business summary
VINAMILK
Established in 1976, Vinamilk has maintained a dominant position in Vietnam’s dairy sector with over 30 years of operational history. Its traditional product is the ‘Longevity’ brand of condensed milk. Vinamilk expanded its product range by introducing powdered milk and cereal products in 1988 and launching UHT milk and yoghurt in 1991. The Group was equitized in 2003 and subsequently listed on HOSE on 19 January 2006. Throughout the years, Vinamilk has expanded its production capacity by acquisition and construction of new plants around the country. At present, the Group operates nine dairy factories with a total capacity of 504 thousand tons per year and one coffee factory with a capacity of 1,500 tons of instant coffee and 6,000 tons of roasted ground coffee.
Invest Rationale
The largest player in the domestic dairy market The Group is the largest dairy producer in Vietnam, capturing around 37.0% of the market share in the domestic dairy market. In terms of product segments, the Group accounted for nearly 85.0% of the market share in the yoghurt and condensed milk segment; and around 45.0% of the market share in the liquid milk segment in 2008. These segments jointly contributed to around 68.0% of its total revenue in 2008. Besides that, Vinamilk’s powdered milk-infant cereals segment accounted for about 29.0% of its total revenue in 2008. The management has set an ambitious target to expand the market share of this segment from 15.0% in 2008 to at least 35.0% over the next two years. Strong brand name Over the years, the Group has built a reputable brand name for its major products. Its highly-popular brand, ‘Vinamilk’, is viewed by many domestic consumers as the most trusted brand for nutritional dairy products. The Group is ranked first in ‘The Top Ten High-Quality Vietnamese Goods’ from 1995 to 2009. According to AC Nielsen, Vinamilk’s contributions in the ‘favorite brand index’ and the ‘brand-used most-often index’ have increased by 14% and 12% y-o-y, respectively, in 2008. Extensive nationwide distribution network Vinamilk has established the largest distribution network compared to its sector’s peers. The Group has 250 distributors selling its products to 125,000 retail outlets covering 64 provinces in Vietnam. This traditional distribution channel accounted for 80.0% of the Group revenue last year. Its modern distribution network through hypermarkets and supermarkets contributed to about 12.0% of the Group’s total revenue, while the remaining 8.0% of its revenue comes from hotels, restaurants, and cafeterias (Horace). Besides that, Vinamilk has consistently been reaching out to assist its distributors in order to strengthen its foothold. The Group has invested in 7,000 fridges, coolers for chilled products and 300 mini-vans to support distributors last year. In 2009, the management plans to invest more than VND 127.0bn in vans and refrigerators to support its distributors and outlets. We believe that such an extensive distribution channel will continue to give Vinamilk a competitive edge against its foreign and domestic peers. The wide market reach also serves as the biggest barrier for its competitors to enter and/or expand their market share in this market. Continuously expanding product offerings The Group has continuously launched new product offerings to meet the increasingly diversified demand of consumers. In 2008, the Group has developed more than 40 new products and successfully FIN 332 - Troy Spring Page 3
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introduced 12 new products to domestic and overseas markets. These include “Probi” yogurt, which help people to enhance the absorption of underlying nutrients and ‘Dielac Diecerna’ for diabetes consumers. The management plans to re-categories its product range tailored for specific consumer classes such as pregnant women, infant, children, teenagers, and elderly. This is expected to help the target consumer group to easily recognize the benefits of the products.
Catalysts for upside potential
Rising demand Rapid urbanization has boosted domestic demand for dairy products. We expect improved living standards and rising health awareness to encourage the consumption of dairy products going forward. Although domestic per capita fresh milk consumption has increased from 3.8kg in 2001 to around 9.0kg in 2008, it remains substantially below the fresh milk consumption per capita in the regional market such as Thailand (25kg) and Singapore (33kg), thus implying favorable growth potential. Upbeat growth prospect According to Agroinfo, Vietnam has the highest retail price of milk in the world. The persistently high consumer milk price, coupled with the robust domestic consumption, has enabled the dairy market to grow exponentially over the past five years. Vietnam’s dairy market has been accredited as the ‘rapid growing sector’ given that it has registered a respectable growth of 15.2% per annum from 1996-2006, only lagging behind the 16.0% annual growth rate registered by China’s dairy market. Among the dairy products, we foresee that powdered milk and fresh milk segments could experience the highest growth rate going forward, given their increased popularity among the domestic consumers and the low market penetration rate. Ambitious target to fulfill the domestic supply gap of milk inputs Domestic dairy producers continue to rely heavily on imported milk inputs. At the end of 2008, Vietnam had 107,983 dairy cattle producing about 262,160 tons of fresh milk input, supplying less than 22% of the milk inputs for domestic production. To reduce the country’s dependency on the imported dairy milk inputs, the authority has set an ambitious target to increase the number of dairy cattle that could fulfill around 40.0% of the domestic demand for fresh milk inputs by 2010. We believe that Vinamilk, being the largest fresh milk purchaser in Vietnam, could benefit enormously from this government measure.
Risks and Safeguards
Price volatility of imported milk input As mentioned before, the Group is highly dependent on imported milk inputs. We understand that milk inputs account for more than 75.0% of the Group’s raw materials cost and 60.0% of its cost of goods sold (COGS). Our sensitive analysis shows that every 10.0%-increase in milk input price will translate into a 22.4%-decline in the EPS, assuming that the ASP of its major product remains constant. Nonetheless, we believe that the active cost control policies engaged by the management will minimize the Group’s exposure to the external volatility of the global milk input prices. Furthermore, the ability of the Group to pass on its increased cost to end-users will mitigate the risk of margin erosion, in our opinion. Rising cost components The Government has approved the hike of the electricity rate by 9.0% as of 1 March 2009, which is expected to increase the Group’s total cost by 1.0%. Furthermore, we expect the Group to incur higher
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marketing expenses going forward to strengthen its market position. Again, the ability of the Group to pass on its increased cost to end-users will mitigate the risk of margin erosion, in our opinion. Competition of high-end product segment to intensify Domestic dairy manufacturers have faced intensified competition from foreign players such as Dutch Lady, Abbott, Meat Johnson and Nestlé. We observe that Vietnamese consumers, particularly the young and affluent people, may prefer the popular foreign brands to domestic brands. Despite the intensified competition, we believe that the Group is able to maintain its dominant position in the market given its popular brand name, extensive distribution network and aggressive marketing campaign. Furthermore, we observe that the challenging economic environment has led to a down trading consumption pattern that favor’s the competitive priced products distributed by Vinamilk. Regulatory risk Given that majority of the Vinamilk’s products serve as essential goods for its consumer, we do not discount the possibility that the Government may restrict the Group’s ability to raise its retail price should the inflation become a concern to the economy.
Peer Comparison
Market Information
Product overview
VNM has a wide range of products including various kinds of milk such as: fresh milk, yoghurt, powdered milk, ice cream and beverage (juice, tea…). Previously there were some kinds of coffee products but they are stopped producing now.
Market overview
Vietnam’s boasts incomparable demographics. It has a large population of 84 million people and more than half of them under the age of 25. Furthermore the country is urbanising rapidly and an urban wealthier population is strongly corelated with a higher per capita dairy consumption. Given that existing per capita consumption is currently very low we believe that annual double digit growth is
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virtually built-in to the market. Currently the market is relatively immature but it is certainly large enough. Dairy products consumption CAGR in Vietnam was 16.3% between 2004 and 2006, well above the regional average of 13 - 14%. Going forward, we expect growth to be sustained at above average regional growth rates of around 14.5%. The main drivers would be higher per-capita consumption, in line with strong GDP growth. Vietnam’s GDP grew by 8.17% in 2006, the second highest in ten years. The Economist Intelligence Unit forecasts that Vietnamese GDP growth will moderate to 7.5% by 2010. Vietnamese currently consume around 9 kg of dairy products per capita annually, which is well below the global and region averages for per-capita consumption. However this is increasing due to five key drivers.
These are population growth; favourable demographics; strong income growth; urbanisation; and lifestyle changes. Combined with these drivers are; (1) a change in people’s eating habits away from traditional foods; and (2) an increase in the consumption of dairy products, due to greater consumer awareness of the perceived nutritional and health benefits of eating more dairy products. This is especially true for younger consumers.
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TABLE OF CONTENTS
VINAMILK
EXECUTIVE SUMMARY ............................................................................................................................. 2 Key statistic of company: ..................................................................................................................... 2 Business summary ............................................................................................................................... 3 Invest Rationale ................................................................................................................................... 3 Catalysts for upside potential .............................................................................................................. 4 Risks and Safeguards ........................................................................................................................... 4 Peer Comparison ................................................................................................................................. 5 Market Information ................................................................................................................................. 5 Product overview ................................................................................................................................ 5 Market overview ................................................................................................................................. 5 COPORATE INFORMATION....................................................................................................................... 8 Company History: ................................................................................................................................ 8 Business Discription: ............................................................................................................................ 9 Business overview: .............................................................................................................................. 9 Business Stratergy: ............................................................................................................................ 11 RELATED PARTIES .............................................................................................................................. 12 FINANCIAL STATEMENT ANALYSIS ......................................................................................................... 14 Operating Results .............................................................................................................................. 14 Cash flow........................................................................................................................................... 17 PEER COMPARISONS ............................................................................................................................. 18 Peer Comparisons:............................................................................................................................. 18 SWOT ANALYSIS .................................................................................................................................... 18 Strength (S) ....................................................................................................................................... 19 Weaknesses:...................................................................................................................................... 20 Opportunities (O) .............................................................................................................................. 20 Threats (T) ......................................................................................................................................... 21 APPENDIX .............................................................................................................................................. 22 Key Ratio ........................................................................................................................................... 22 Balance Sheet .................................................................................................................................... 23 Income Statement ............................................................................................................................. 24
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COPORATE INFORMATION
Company History:
1976 : Company was founded under the name of Southern Coffee-Dairy Company, a subsidiary of the General Food Directorate and had six factories in operation, namely Thong Nhat Dairy Factory, Truong Tho Dairy xdscxsedsFactory, Dielac Factory, Bien Hoa Coffee Factory, Bich Chi Powder Factory and Lubico. 1978 : The management of Company was transferred to the Ministry of Food Industry and Company was renamed United Enterprises of Milk Coffee Cookies and Candies I. 1988 : Introduced powdered milk and cereal with milk powder at the first time in Vietnam. 1991 : Launched UHT milk and spoon yoghurt to Vietnam market. 1992 : The United Enterprises of Milk Coffee Cookies and Candies I was formally renamed Vietnam Dairy Company and came under the direct management of the Ministry of Light Industry. Started focusing on the manufacturing and processing of dairy products. 1994 : Hanoi Dairy Factory was built in Hanoi as part of Company’s expansion and market development strategy to cater to the market in the northern region of Vietnam. 1996 : Binh Dinh Dairy Joint Venture Enterprise was founded as the result of our joint venture with Dong Lanh Quy Nhon Joint Stock Company. This joint venture enabled our Company to successfully gain access to the market in the middle region of Vietnam. 2000 : Can Tho Dairy Factory, which is located in Tra Noc Industrial Zone, Can Tho City was built to better meet the demands of consumers in the Mekong Delta. In the same year, we set up the Logistics and Warehouse Enterprise located in 32 Dang Van Bi St., Ho Chi Minh City. 2003 : Was formally converted into a joint stock company in December 2003 and changed its name to Vietnam Dairy Products Joint Stock Company to reflect its change in status. 2004 : Acquired Saigon Milk Joint Stock Company. Increased share capital to VND 1,590 billion 2005 : Bought over our joint venture partner’s remaining shareholdings in Binh Dinh Dairy Products Company Ltd (as Binh Dinh Dairy Factory was then known) and inaugurated Nghe An Dairy Factory, located in Cua Lo Industrial Zone, Nghe An province, on 30 June 2005. * Entered into a joint venture agreement with SABMiller Asia B.V. and established SABMiller Vietnam Joint Venture Company Ltd. in August 2005. Our first joint venture product, Zorok, was also launched in the first half of 2007. 2006 : Vinamilk was listed on the HOSE on 19 January 2006 with the SCIC holding approximately 50.01% of our Company’s shareholdings. FIN 332 - Troy Spring Page 8
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* Opened An Khang Clinic in Ho Chi Minh City in June 2006. This is the first clinic in Vietnam managed by a sophisticated electronic management system. The clinic offers a diverse range of services such as nutritional consulting, gynecology testing, pediatrics consulting and health screening. * Commenced our dairy cow farms program with the acquisition of Tuyen Quang dairy farm, a small scale farm with 1,400 heads of cows in November 2006. The Tuyen Quang dairy farm was operational at the time of acquisition. 2007 : Acquired a 55% interest in Lam Son Milk Company Ltd. in September 2007, located in Le Mon Industrial Zone, Thanh Hoa province. 2008: Tien Son Dairy Factory was inaugurated and put into operation in Hanoi. 2010: Acquired 100% shares from F&N Vietnam Limited and changed its name to Dielac Dairy One Member Co., Ltd. Invested NZD12.5 million, equivalent to 19.3% of share capital in Miraka Limited in New Zealand. Acquired the remaining shares of Lamson Milk Joint Stock Company and changed its name to Lam Son Dairy One Member Co., Ltd. Inaugurated and put the Beverage Factory into operation in Binh Duong.
Business Discription:
Vinamilk wish to be the most favourite product in all areas, territories. Therefore, we meditate that quality and creation is the companion of Vinamilk. Vinamilk considers customers our focus and commit to meet all demands of customers. Always satisfy customers with high-quality, safe, and diverse products, the best service and competitive prices. Vinamilk will be the fastest and sustainable growing healthy dairy and food company by building a long-term competitive advantaged product portfolio across the scale.
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Business overview:
In the year 2009, Vinamilk continues to be a leader in the dairy market in Vietnam. Over time, products of Vinamilk have obtained growing trust and become a favorite brand of consumers. All the lines of products have experienced an exceptional and sustainable growth. Total sales reached an increase of 29.3%, of which local sales seen a growth of 34.6%. The distribution network has been strongly reinforced and developed. The company has reached targets of both sales volumes and profits set out by the Shareholder’s Meeting at the beginning of the year. The broad range of Vinamilk’s dairy products is divided into the 6 groups, in which, four first groups are the key products lines, contributing over 95% to the total sales of the Company. • Group of powdered milk and infant cereals • Group of condensed milk • Group of liquid milk • Group of yogurt, ice-cream and cheeses • Group of fruit juice, soy-bean milk, purified water • Group of Vinamilk coffee FIN 332 - Troy Spring Page 9
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Powdered milk and infant cereals This group is consumed at both local market and for exports. These are the key products of Vinamilk for export to the Middle East. Sales from these products make a contribution of 20% to local sales of the Company and experienced a growth of 32.5% in comparison with those in 2008. This market segment of Vinamilk is under the severe competition with the imported products of international brands as well as from the other local competitors. The potential for growth of this product range is great and in the coming years, this will be the ongoing emphasis of Vinamilk’s development strategy. Condensed milk Condensed milk is a traditional product of Vinamilk, which was firstly launched in 1976. In the year 2009, sales from condensed milk products have contributed 25% to the local sales of Vinamilk and increased 13.3% incomparison with those in 2008 though its proportionin the Company’s product structure has been graduallydecreased upon the development strategy of Vinamilk.Majority of condensed milk products are consumed inVietnam and a small part is exported to Cambodia andthe Philippines. Liquid milk Liquid milk includes UHT fresh milk and drinking yogurt. This segment of products is the biggest sales contributor to the local sales of Vinamilk with the contribution of 34.6% and sales from these products also grew at the rate of 47.8% as compared with those in 2008. All the liquid milk products are consumed in Vietnam’s market. The competition in the market segment of liquid milk is highly intensive since there are many other local involving players, not mention to some UHT milk product brands imported. In the coming years, liquid milk remains the focus in Vinamilk’s strategy for development. Yoghurt, ice-cream and cheeses The key product of this group is spoon yogurt. The sales from this group account for 17.2% of Vinamilk’s local product sales and have seen a growth of 51.7% as compared with those of the year 2008. Vinamilk has remained its dominant position in this market segment. It is our view that the perspective for the development of this product range in the future is still great. Fruit juice, soy-bean milk, purified water The sales of this group are mostly from fruit juice and soy-bean milk products. At the end of the year 2009, the company has launched successfully the line of non-gas beverage products, which are better for health, including marrow squash, orange smoothie, strawberry smoothie. Although this group of products makes a small portion in the company’s total revenues but it offers a great and strong potential for the company’s development in the coming time.
Sources: Vinamilk Corporation 2010 annual report, Vinamilk Corporation website.
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Business Stratergy:
Mission -
VINAMILK
Vinamilk commits to bring the communities the best-quality nutrition source that conveys out respectability, love and responsibilities for the people, life and society.
Strategy / Business Plan 2010 The company’s ultimate goal is to maximize the values to shareholders and to keep up with strategy for business development basing on following key factors: • Reinforcing and developing a system of powerful brands to satisfy the demand and consumption trends of Vietnamese consumers. • Developing Vinamilk to the most reliable and trusted brand on nutrition products and scientific credibility by application of scientific researches on specific demands of Vietnamese on nutrition in order to develop and launch the best products to Vietnamese consumers. • Making more investment into expanding its business and market of healthy beverage products through the core brand of Vfresh to meet the increasing demands for healthy and natural beverages. • Strengthening its distribution quality and network coverage to expand its market share in the market where Vinamilk’s segment is not high, especially in rural area and small towns. • Exploring the power and reliability of Vinamilk as “most reliable and trusted brand on nutrition products and scientific credibility to the Vietnamese” in order to take up at least 35% of powdered milk market segment in the next 2 years. • Developing comprehensively the portfolio of dairy products, targeting the extensive quantity of various consumers and expanding value-added products with high selling prices in order to increase the company’s profitability. • Continuing improvement of the supply network management capacity. • Keeping expansion and development of a stable, active and effective distribution network. • Developing material sources to ensure a stable fresh milk supply with high and reliable quality and competitive prices. Long-term »» Strengthening and expanding its marketing and distribution network: to open more outlets, to enhance its market penetration and invest more for selling equipment;
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VINAMILK
»» Upgrading the entire current plants and building new production plants with international technology to improve the production capacity to meet the market demand; »» Investing and developing cow farms locally and overseas; »» Investing in R&D to introduce higher value-added products to consumers; »» Committing to consumers with the best quality products by applying ultimate standards of such quality management systems as ISO, HACCP; »» Improving the corporate governance and risk management to minimize losses to the Company and its shareholders; »» Growing the business in harmony with promoting environmental friendliness and social responsibility. With the above strategy, Vinamilk aims to achieve the sales target of USD 1 billion. Competition The dairy market in Vietnam is highly competitive. Besides the local competitors, Vinamilk has to compete with the imported powdered milk products. However, in August 2009, the Vietnam’s Politburo launched the campaign of “Vietnamese people use Vietnamese goods”. Under this campaign, the dairy products are the goods that receive the highest priority and this has contributed to reinforce the competitive capacity of the local dairy producers and Vinamilk is the one.
RELATED PARTIES
Shareholder structure 2010 (%) State Capital (SCIC) Investment Corporation 47.30 46.00 6.70 100.00 2009 (%) 47.64 44.11 8.25 100
Foreign shareholders Local shareholders (excluding SCIC)
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Company research
Board of Directors/Management Name Mrs.Mai Kieu Lien Position Chairwoman General Director Thu Vice Chairman Excutive Director Finance Profile -
VINAMILK
Bachelor of science degree, Mosco University of Meat & Milk Processing Technology, Russia Finance-Accounting University of Ho Chi Minh City, majoring in accounting and finance in 1984 Master of Business Administration degree Master of Business Administration degree
Mrs.Ngo Trang
Thi
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Mr.Hoang Nguyen Member of Management Hoc Board Mr.Le Anh Minh Member of Management Board -
Bachelor of Administration and Economics from Vietnam’s University of Banking - Master of Business Administration from Wharton Business School, University of Pennsylvania USA Mr.Wang Eng Chin Member of Management - Bachelor of Business Administration and Board Master of Business Administration from University of Mississippi, USA Mrs.Nguyen Thi Excutive Director Supply - Bachelor degree in Milk Processing Thanh Hoa Chain Technology, Moscow University of Meat & Milk Processing Technology Mrs.Nguyen Thi Nhu Excutive Director Raw - Bachelor degree in business Administration, Ho Hang Materials Development Chi Minh City University of Economics. Mr.Tran Minh Van Excutive Director Project - Bachelor degree in engineering, Ho Chi Minh City Polytechnic University. - Bachelor in Business Administration from Ho Chi Minh City University of Economics - Bachelor of Law with major in commercial laws from Ha Noi University of Laws - Master in Business Administration from Ho Chi Minh City University of Economics Mr.Nguyen Quoc Acting Excutive Director - Bachelor in Business Administration Khanh Production and R&D from Ho Chi Minh City University of Economics - Bachelor of English from Ho Chi Minh City University of Social Science and Humanism Ms.Nguyen Huu Ngoc Acting Excutive Director Tran Marketing Mr.Pham Phu Tuan Acting Excutive Director Sales Graduated from Ho Chi Minh City University of Foreign Trade. Graduated from Ho Chi Minh University of Finance and Accounting Master degree in Business Administration from Texas University in Dallas
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Company research
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VINAMILK
Almost all members of the management team have graduated overseas with solid background in business management.
Sources: Vinamilk Corporation 2010 annual report, Vinamilk Corporation website.
FINANCIAL STATEMENT ANALYSIS
Operating Results
Q2/2010 REVENUE Deduction NET REVENUE Revenue growth rate COST OF GOOD SOLD % of revenue GROSS PROFIT/ (LOSSES) Gross margin Financial income Financial expenses Selling/G&A expenses % of revenue Selling expenses % of revenue G&A expenses % of revenue OPERATING (LOSSES) % of revenue Other income FIN 332 - Troy Spring PROFIT/ 1,033,520 26% 73,310 1,235,406 23% 71,618 Page 14 (2,639,523) 66% 1,363,909 34% 123,233 (38,541) (415,081) 10% (333,139) 8% (81,942) 2% 4,084,308 (80,876) 4,003,432 Q2/2011 5,581,368 (117,544) 5,463,824 36% (3,769,943) 69% 1,693,881 31% 198,133 (130,663) (525,925) 13% (418,830) 10% (107,095) 3%
Company research
Other expenses Other profit NET PROFIT BEFORE TAX Income tax Income tax rate NET PROFIT AFTER TAX % of revenue NPAT growth rate NPAT margin EPS EPS growth Revenue Revenue mix: In 2009, watery milk contributes 35% of the company’s revenue. While condensed milk has second largest contribution of 25%. Condensed milk had been the first one since the foundation of the company. Therefore, we can see that the company now focuses more on watery milk. Milk powder, yogurt and other products in turn takes 20%, 17% and 3%. 23% 2,637 (22,404) 50,906 1,084,426 (154,661) 14% 929,765 23%
VINAMILK
(12,800) 58,818 1,294,224 (201,013) 16% 1,093,211 20% 18% 20% 3,054 16%
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Revenue growth: Vinamilk has an impressive growth rate of 36% in a year (from Q2/2010 to Q2/2011). Revenue from milk powder raise rapidly from 2006 (approximately 400 billion VND) to 2009 (approximately 2.800 billion VND) Revenue from yogurt also has a dramatic increase from 600 billion VND (2006) to 3.000 billion VND (2009). Having 97% of market share. The raise in milk’s price also made Vinamilk’s revenue to increase. Therefore, the company’s profit only grew 18% (profit is compared between Q2/2010-Q2/2011).
Profitability COGS increases from 66% in Q2/2010 to 69% in Q2/2011. Selling, General and Administrative expense in total also raise by 3% in Q2/2011 (from 10% to 13%) Page 15
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Company research
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VINAMILK
However, Vinamilk is still able to have 18% raise in NPAT compare to Q2/2010. EPS has a 16% growth compare to Q2/2010. Balance sheet (Million VNĐ) Q2/2010 5,804,398 234,843 2,092,260 1,119,075 2,272,650 85,570 4,949,909 24 3,058,038 2,278,666 126,013 653,359 73,329 1,659,632 158,886 10,754,307 Q2/2011 9,449,801 182,307 3,129,070 2,024,139 3,982,755 131,530 5,288,725 10 3,432,986 2,663,847 210,999 558,140 73,801 1,625,410 96,518 14,678,526
CURRENT ASSETS Cash and cash equivalent Short-term investment Short-term receivable Inventory Other current assets NON-CURRENT ASSETS Long-term receiable Fix asset - Tangible fixed assets - Intangible fixed assets - Construction in progress Investment in real estate Financial long-term investment Other non-current assets TOTAL ASSETS:
LIABILITIES Short-term liabilities Long-term liabilities OWNER'S EQUITY
2,803,351 2,643,647 159,704 7,950,956
3,391,844 3,248,164 143,680 11,286,682
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Company research
Owner's investment Share premium Treasury stock Investment and development fund Reserve fund Undistributed earnings (after tax) TOTAL LIABILITIES AND EQUITY Total asset growth Current Ratio (x) ROA ROE 2.20 8.65% 11.69% 3,530,721 (669) 2,172,291 353,072 1,895,541 10,754,307
VINAMILK
3,708,256 1,276,994 (1,054) 2,468,174 370,825 3,463,487 14,678,526 36.49% 2.91 7.45% 9.69%
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In Q2/2011, cash and cash equivalent is 182.307 million VND, takes 1.24% total assets of the company. Current ratio increases significantly from 2.20 (Q2/2010) to 2.91 (Q2/2011). The raise is mainly because of high current assets of Vinamilk. Vinamilk’s ROA and ROE is not very high and lower than that of Q2/2010. The reason is Vinamilk is using money to invest in a milk factory in New Zealand. The factory has just been opened this month. Total asset growth rate is 36.29%, it is a good growth for a big company like Vinamilk.
Cash flow
According to the statement of cash flow in Q2/2011, the ending balance of Cash and Cash equivalent is 452,083,174,487 VND. It has a growth rate of 147.97% (compare to Q2/2010). The dramatically raise in cash-flow comes from impressive operating results.
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Company research
PEER COMPARISONS
Peer Comparisons:
Vinamilk Corporation Produce and distribute condensed milk, powdered milk, fresh milk, soya milk, yogurts, icecream, cheese, fruit juice, coffee and other products derived from milk. Vietnam 2115 SCIC (47.6) Foreign shareholders (46) Local shareholders (6.7) 175,275,670 10,773 21,349.4 9.3% Dutch Lady Bhd The manufacture and/or distribution of sweetened condensed milk, milk powder, dairy products and fruit juice drinks in the home market and for export. Malaysia 213 Nestle Bhd
VINAMILK
Main activities
Stock Exchange Market cap Current ownership structure Number of shares outstanding Total assets Revenues Net profit margin Debt/Equity ratio EPS ROA ROE P/E P/B -
US$ m
Provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night. Malaysia 1579
Meiji Dairies Corporation The Group's principal activities are the manufacture, processing and marketing of milk products such as ice cream, cheese, butter, ... Japan 1,640
%
n/a
n/a
n/a
2010 VND b VND b 2011F % 2011F 2011F% 2011F% 2011F% 2011F % 2011F %
n/a 8,482 10,613.8 9% 0.56% 20.0% 19.5% 15% 30.1% 6.0
n/a 9,302 29,485.1 n/a 2.5% 5.0% 16.3% 27% 36.5% 9.1
n/a 11,029 18,495.3 n/a 1.4% n/a 18.8% 29% 15.7% 1.7
0.1%
15.9% 16.7% 45% 29.8% 8.3
There’s no main competitors with Vinamilk Corporation in Vienam, but still have some companies can compare in some fields. Vinamilk has the highest ROE.
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Company research
VINAMILK
SWOT ANALYSIS
Strength (S)
Vinamilk is undoubtedly a familiar and trusted brand in the mind of Vietnamese consumers during the last 34 years, account for 80% market shares in 2008. VNM is the biggest milk. Established since 1976, Vinamilk has grown strongly and become the leading business of the industry of milk processing. Obviously, its long history is the first and foremost strength to make it become the biggest dairy producer in Vietnam. Throughout more than 30 years’ operating, Vinamilk has become a familiar trademark to domestics’ clients. Also, Vinamilk has gained a great customer understanding and satisfaction as well as knowledge of the local market. Vietnam is a potential market for milk field with high population growth rate, and children account for more than 36%. Vietnam’s economic is developing more and faster, so people take care much more about their health; their demand in using milk is higher. Production are various and at high quality, price is lower than others production which are imported. In there, Yogurt and Fresh milk are two biggest production lines which account for the large part of VNM’s market share. In addition, VNM is also improving the new production, which Vinamilk Sliming Milk. When the Fat rate is increasing fast, demanding of lost weight is more urgent, this new production line of VNM will be accepted by a large of Vietnamese people. Besides, VNM owns many other production lines, such as Drinking Yogurt, Cheese, Ice-Cream, Condensed milk, etc. Another remarkable factor that has actually strengthened Vinamilk’s leading position in the market is that it already holds a strong distribution presence which spreads nationwide, from urban to rural, coastal and mountainous areas. The distribution network is the decisive factor for the success of a consumer goods producer. Vinamilk is now operating agencies at grassroots levels like villages in rural areas, and almost all shops on the main streets of major cities sell Vinamilk products. In addition to the strong domestic distribution with the network of 183 agencies spreading over 64/64 provinces, cities, and Vinamilk products are exported to United States and many European countries as well as area of Middle-East and Southeast Asia. Owning the advanced production line. Along with the solid distribution network, technology capability is another key to success making Vinamilk a top business of the Vietnam milk industry branch. Vinamilk has ceaselessly renovated its technology, invested in modern production lines, improved administrative and products quality so as to meet increasingly high demands from customers. Vinamilk, the market leader in Vietnam for production of dairy products, has placed an order with GEA Process Engineering for the delivery of two complete dairy processing lines for production of infant formula. The order of more than 30 million euro marks Vinamilk’s biggest single investment in dairy processing equipment. For the time being, VINAMILK possesses the most modern production lines in Vietnam which ensure the quality and hygiene. Additionally, Vinamilk also takes advantages of technical support from other firms to
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Company research
VINAMILK
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improve administration. Last year, it signed an Enterprise Agreement (EA) with Microsoft in Vietnam The marketing and advertising policies are suitable. VNM’s advertisement is very interest with funny images and sounds. Their symbol is lovely milch cows, which are loved much by almost children. Moreover, VNM has a really good marketing policy. They take care of another part – the poor children, who have no ability to buy their goods, byraising funds for charity. For example, Scholarship Fund for poor children; 1 million milk glass for poor children, etc. By the way, they had not only built their prestige butalso increased their revenue also by sharing with unlucky people.
Weaknesses:
Materials accounting for percentage of 60% - 70% product price should the price increase. Currently, buying fresh milk from households provided about 25% of raw materials for the company left most is imported. Risks associated with raw materials, the company may face risks of exchange rate. Just focus on domestic market and the marketing policy focus mainly on the South of Vietnam. VNM just export productions to some countries with very low rate (the main one is Iraq) Have no high-class production line. Therefore, a few of customers, who have high demand, will buy imported productions from other bigger countries. So, VNM lost an amount of the potential customers, which can increase their revenue much. High percentage of government ownership (> 50%) making the stock less attractive to investors.
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Opportunities (O)
Domestic per capita milk consumption is now just 10 kg, expected to grow into 12 by 2010, and 80 million populations with increasing income suggest the increasing in demand for dairy products in the next few years. Supply of raw materials are quite stable in the future, Vietnam Dairy milk will gradually decrease the proportion of imported raw materials, instead of cow'smilk fresh source material, ensuring quality dairy products for consumers and contribute to promoting the domestic industry support. These factors have a positive impact to production and business operations of the company. New business directions in beer production and real estate and other investments (in VF1, Vegetable Oil Parking JSC, BienHoa Sugar etc) are estimated promising and beneficial. Strategy of Vertical Integration by strengthened investment in local dairy farms construction (>US$10mn) can reduce milk input imports to less than 60% by 2010 (75% actually) Widen market to other countries after Vietnam became a member of WTO
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Company research
Threats (T)
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VINAMILK
Competition in almost product lines by big competitors as Dutch Lady, NutiFood, Nestlé VN… The domestic economic is unstable, high inflation rate will raise the material prices and raise cost of goods also. There are more competitors after join to WTO The main exported market is Iraq, (account for 82% revenue), but it is not stable, so if breakdowns occur VNM will meet troubles.
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Company research
VINAMILK
APPENDIX
Key Ratio
FY 2003 Liquidity Ratio Current Ratio Quick Ratio Management Efficiency Inventory Turnover Receivable Turnover Asset Turnover Fixed Asset Turnover EBIT EBIT/Total Asset Market Value Number of shares in market Book Value EPS EPS Growth rate Profitability Gross Margin Gross Margin Before Tax Gross Margin After Tax ROA ROE 29.22% 18.27% 12.43% 2.13% 3.60% 25.09% 12.87% 12.25% 20.26% 28.52% 22.33% 9.93% 9.98% 14.44% 26.12% 24.27% 11.10% 11.05% 20.27% 27.40% 27.26% 14.37% 14.49% 17.76% 22.81% 31.65% 16.71% 15.23% 20.95% 26.79% 36.54% 25.73% 22.38% 28.01% 36.80% 2.199 3.043 3.056 3.365 1.522 2.01 2.541 3.583 3.399 4.802 3.278 4.327 3.265 5.225 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
0.533 0.560 0.172 1.996 82,564 3%
4.068 23.640 1.655 10.082 552,405 22%
4.050 7.532 1.447 7.445 569,863 15%
5.190 12.937 1.834 6.175 734,470 20%
2.896 10.154 1.225 4.037 955,381 18%
3.161 12.700 1.376 4.238 1,371,313 23%
5.134 14.567 1.251 4.204 2731358 32%
150,998,962 10,335 372
157,922,672 11,493 3,278 782%
159,000,000 13,551 3,539 8%
159,000,000 16,792 4,601 30%
175,275,700 24,101 5,497 19%
175,275,700 26,619 7,132 30%
351,265,300 18,378 6,763 -5%
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Company research
VINAMILK
Balance Sheet
% of Total Assets FY 2009 FY 2010 5,804,397,860,378 234,843,207,079 2,092,259,762,292 1,119,075,135,003 2,272,650,052,063 85,569,703,941 4,949,906,765,951 23,624,963 3,058,038,713,598 2,278,666,157,863 126,013,324,335 653,359,231,400 73,328,395,211 1,659,632,386,999 158,885,645,450 10,754,306,626,329 FY 2009 5.99% 4.93% 27.45% 8.94% 15.19% 3.40% 40.09% 0.10% 27.56% 19.60% 0.28% 7.68% 0.00% 9.50% 2.93% 100.00% FY 2010 53.97% 2.18% 19.46% 10.41% 21.13% 0.80% 46.03% 0.00% 28.44% 21.19% 1.17% 6.08% 0.68% 15.43% 1.48% 100.00%
CURRENT ASSETS Cash and cash equivalent Short-term investment Short-term receivable Inventory Other current assets NON-CURRENT ASSETS Long-term receiable Fix asset - Tangible fixed assets - Intangible fixed assets - Construction in progress Investment in real estate Financial long-term investment Other non-current assets TOTAL ASSETS:
5,050,274,123,753 415,417,916,497 2,314,253,566,692 753,498,136,776 1,280,773,657,392 286,330,846,396 3,379,906,340,869 8,822,112,758 2,322,962,709,746 1,652,108,063,492 23,390,560,883 647,464,085,371 801,180,628,831 246,940,889,534 8,430,180,464,622
LIABILITIES Short-term liabilities Long-term liabilities OWNER'S EQUITY Owner's investment
FIN 332 - Troy Spring
1,967,829,451,949 1,711,593,056,787 256,236,395,162 6,462,351,012,673 3,512,653,000,000
2,803,350,338,459 2,643,646,520,653 159,703,817,806 7,950,956,287,870 3,530,721,200,000
23.34% 20.30% 3.04% 76.66% 41.67%
26.07% 24.58% 1.49% 73.93% 32.83%
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Company research
Treasury stock Investment and development fund Reserve fund Undistributed earnings (after tax) TOTAL LIABILITIES AND EQUITY
(154,222,000) 1,756,282,910,335 294,347,876,431 899,221,447,907 8,430,180,464,622 (669,051,000) 2,172,290,789,865 353,072,120,000 1,895,541,229,005 10,754,306,626,329
VINAMILK
0.00% 20.83% 3.49% 10.67% 100.00% -0.01% 20.20% 3.28% 17.63% 100.00%
Income Statement
% of Total Net Revenue FY 2009 Net Revenue Sales Deduction Cost of good sold Gross Profit Earnings from Financial Activities Selling Expenses General and Adminitrative Expense Financial Expenses Other Income Earnings Before Taxes Taxes Net Income EPS 10,856,364,113,495 (206,370,629,645) (6,777,573,637,378) 3,872,419,846,472 435,650,789,236 (1,245,476,021,840) (279,959,615,835) (187,163,859,556) 137,093,220,509 2,732,564,358,986 351,419,086,078 2,381,145,272,908 6.785 FY 2010 16,173,754,854,110 (328,600,184,161) (10,676,719,801,966) 5,168,434,867,983 447,982,910,578 (1,438,185,805,872) (370,492,890,936) (186,706,228,159) 610,517,546,817 4,231,550,400,411 635,714,485,637 3,595,835,914,774 10.193 FY 2009
100.00% -1.90% -62.43% 35.67% 4.01% -11.47% -2.58% -1.72% 1.26% 25.17% 3.24% 21.93%
FY 2010
100.00% -2.03% -66.01% 31.96% 2.77% -8.89% -2.29% -1.15% 3.77% 26.16% 3.93% 22.23%
FIN 332 - Troy Spring
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