Vinamilk stock price decline

Statistics from Nguoi Dua Tin show that since the beginning of the year, VNM shares of Vietnam Dairy Products Joint Stock Company ( Vinamilk ) have decreased by more than 21%, with a 5% decrease in market price in the past month alone to 67,000 VND/share (ending session on May 29). Meanwhile, the VN-Index has increased by 1.6% since the beginning of the year and increased by 3% in the past month.

VNM's market price at this time has not improved much, falling from VND 80,750/share at the beginning of 2022 and bottoming out at VND 61,300/share in mid-June 2022 before recovering and currently priced at VND 67,000/share.

Vinamilk's market capitalization is currently VND141,280.99 billion, making the company fall to 6th place in the top 10 companies with the largest market capitalization. In its heyday, VNM was the stock with the largest market capitalization on the stock exchange.

If the decline continues, along with the rise of banking stocks, VNM's capitalization value may even be pushed down to 8th place in the near future. Currently, VNM's capitalization is only 12% higher than the 3 banks ranked behind, TCB, BID and CTG. This difference can theoretically be filled in just one trading session if VNM falls sharply and banking stocks increase sharply.

That shows that the position of VNM shares on the Vietnamese stock market is very different from before.

VNM shares have plummeted since 2021 until now.

According to data from VietstockFinance, foreign investors net sold VND2,772 billion on HoSE in April, the strongest net selling level since the beginning of the year. Not to mention, from April 6 to 14, there was a series of 7 consecutive net selling sessions by foreign investors with a value of VND2,115 billion.

Of which, VNM is the second most net sold stock by foreign investors on the HoSE with a net selling value of up to VND 418 billion, continuing the non-stop net selling streak since the beginning of 2023.

Currently, Vinamilk's brand value reaches 2.8 billion USD, an increase of 18% over the same period in 2022, ranking 2nd in the top 5 strongest milk brands globally and 6th in the top 10 most valuable milk brands in the world .

In 2022, Vinamilk is the only enterprise in the dairy industry to be present in the Vietnam - Foods of VietNam pavilion at the world's largest agricultural and food trade fair Gulfood Dubai 2022. VNM has also been recognized as a prestigious exporter for the 6th time.

Looking at the financial picture, in the first quarter of 2023, Vinamilk recorded net revenue of VND 13,918 billion, unchanged from the same period last year. In addition, revenue from financial activities increased sharply from VND 320 billion in the first quarter of 2022 to VND 419 billion in the first quarter of 2023, equivalent to an increase of 30%.

On the other hand, Vinamilk's expenses in the quarter all increased sharply compared to the same period last year. Accordingly, financial expenses increased by nearly 20% to VND 158 billion, mainly due to interest expenses increasing by 215% compared to the first quarter of 2022.

In addition, 2,942 billion VND is the amount of money that Vinamilk spends on sales. The "heavy" expense includes more than 2,202 billion VND in service costs, promotions, displays, product introductions and sales support, accounting for 74.8% of the structure. Thus, Vinamilk spends up to 24.46 billion VND every day on product advertising.

Before tax, Vinamilk achieved a profit of VND2,312 billion in the first quarter of 2023. After deducting expenses, Vinamilk reported a profit of VND1,906 billion, down 16.5% over the same period.

The company set a revenue target of VND 63,380 billion in 2023, an increase of 5.5% over the same period, and a pre-tax profit target of VND 10,496 billion, equal to that of 2022. Completing the first quarter of 2023, Vinamilk completed 22% of the revenue plan and 22% of the pre-tax profit plan.

The company said it is facing a lot of competition and challenges in the Liquid Milk and Powdered Milk segments, so the SG&A/revenue ratio for the whole year of 2023 will have to be maintained similar to last year to support sales and regain market share in the rest of the year. However, there are still some small segments such as nut milk that recorded positive growth.

Domestic revenue growth is negative in the first quarter of 2023 (Source: BVSC).

BVSC Securities forecasts that in 2023, VNM's net revenue will reach VND 61,061 billion, up 1.8% year-on-year, and after-tax profit will reach VND 8,985 billion, up 5.5% year-on-year.

However, the analysis team still believes in the story of a gradual recovery in profit margins in the second half of 2023 and 2024, and forecasts a profit growth of 10.4% in 2024. EPS is projected at VND3,824 and VND4,219/share, respectively, corresponding to P/E of 18.2x and 16.5x for 2023 - 2024.

KBSV Securities also commented that VNM's domestic market will continue to move sideways due to increasingly fierce competition, making it difficult for VNM to increase market share; demand for milk consumption in Vietnam is still low; in the short term, consumer purchasing power cannot recover immediately when income is affected after the wave of staff cuts at the end of 2022.

The analysis team assesses that the outlook for 2024 will be more positive as it continues the recovery momentum of consumption from the end of 2023; the demand for dairy products in Vietnam increases as the milk consumption per capita in Vietnam is still low compared to other countries in the region. For 2024, KBSV expects VNM's net revenue and after-tax profit to reach VND 64,439 billion and VND 9,942 billion, respectively, up 4% and 6.1% compared to 2023 .

Source: https://www.nguoiduatin.vn/da-giam-cua-co-phieu-vinamilk-a610134.html