VNM 20112014 VPBS TA 
VIETNAM DAIRY PRODUCTS JSC (VNM)
November 20, 2014
INITIATE COVERAGE: BUY
Current Price (19/11/2014):
Target Price:
VND
VND
101,000
113,000
Short Term Trading Recommendation
Resistance Level
VND
Support Level
VND
Hold
108,000
104,000
Bloomberg ticker: VNM VN
Exchange: HSX
Industry:
Consumer
Beta
0.71
52w Low / High (VND)
98,500 – 121,000
Outstanding Shares (mn)
1,000
Market Cap (VND bn)
101,011
Free Float (mn shares)
574.6
6M Avg Trading Vol
173,208
Foreign-owned Ratio (%)
49%
Cash dividend
Year
EPS (TTM)
(% par)
2015F
40%
7,172
2014F
40%
6,622
2013
48%
7,835
2010 – 13
2014E
2014 - 19F
CAGR
(VND bn)
CAGR
Revenues
25%
36,021
15%
EBITDA
31%
8,697
7%
Net Income
22%
6,622
6%
Ratio
VNM
Peers
VNI
PE
17.8
18.7*
15.2
PEG
(3.9)
(1.2) na P/B
5.88
4.38
2.00
EBIT/I
145.33
12.68 na EV/EBITDA
12.18
18.73
10.92
ROE
34%
13%
14%
*Peer group is not Vietnamese companies
Company Description: VNM has a full value chain from raising cows, processing and producing a variety of dairy products from powdered milk, condensed milk, yogurt, soya, cheese to ice cream. Besides that, VNM also takes part in producing soft drinks. As of September 2014, total assets were VND23,908 billion and total equity was
VND18,122 billion.
VNM VN
30
VNINDEX
20
10
0
01/14
-10
02/14 03/14
04/14
05/14
06/14
07/14
08/14
09/14
10/14
-20
We initiate coverage of Vietnam Dairy Products JSC (VNM) with a long-term BUY recommendation based on a target price of
VND113,000 and a dividend yield of 4%:
Leading market position: VNM is well-positioned with 50% market share. VNM possesses a strong brand name and a distribution network with more than 224,000 retailing points. Thanks to the extensive distribution channels, 70% of VNM’s domestic revenue has come from rural areas while the remaining 30% has come from large cities. Slowing revenue growth: From 2009 to 2013, revenue of VNM grew at CAGR of 31% per year. We forecast that the company is entering a more stable growth phase and we assume that rate will
November 20, 2014
INITIATE COVERAGE: BUY
Current Price (19/11/2014):
Target Price:
VND
VND
101,000
113,000
Short Term Trading Recommendation
Resistance Level
VND
Support Level
VND
Hold
108,000
104,000
Bloomberg ticker: VNM VN
Exchange: HSX
Industry:
Consumer
Beta
0.71
52w Low / High (VND)
98,500 – 121,000
Outstanding Shares (mn)
1,000
Market Cap (VND bn)
101,011
Free Float (mn shares)
574.6
6M Avg Trading Vol
173,208
Foreign-owned Ratio (%)
49%
Cash dividend
Year
EPS (TTM)
(% par)
2015F
40%
7,172
2014F
40%
6,622
2013
48%
7,835
2010 – 13
2014E
2014 - 19F
CAGR
(VND bn)
CAGR
Revenues
25%
36,021
15%
EBITDA
31%
8,697
7%
Net Income
22%
6,622
6%
Ratio
VNM
Peers
VNI
PE
17.8
18.7*
15.2
PEG
(3.9)
(1.2) na P/B
5.88
4.38
2.00
EBIT/I
145.33
12.68 na EV/EBITDA
12.18
18.73
10.92
ROE
34%
13%
14%
*Peer group is not Vietnamese companies
Company Description: VNM has a full value chain from raising cows, processing and producing a variety of dairy products from powdered milk, condensed milk, yogurt, soya, cheese to ice cream. Besides that, VNM also takes part in producing soft drinks. As of September 2014, total assets were VND23,908 billion and total equity was
VND18,122 billion.
VNM VN
30
VNINDEX
20
10
0
01/14
-10
02/14 03/14
04/14
05/14
06/14
07/14
08/14
09/14
10/14
-20
We initiate coverage of Vietnam Dairy Products JSC (VNM) with a long-term BUY recommendation based on a target price of
VND113,000 and a dividend yield of 4%:
Leading market position: VNM is well-positioned with 50% market share. VNM possesses a strong brand name and a distribution network with more than 224,000 retailing points. Thanks to the extensive distribution channels, 70% of VNM’s domestic revenue has come from rural areas while the remaining 30% has come from large cities. Slowing revenue growth: From 2009 to 2013, revenue of VNM grew at CAGR of 31% per year. We forecast that the company is entering a more stable growth phase and we assume that rate will