Company Insight

Retain BUY rating and TP at VND110,000

We reiterate our BUY rating for Vinamilk and remain target price at VND110,000 as Vinamilk‘s 2Q21 business result is on track as our forecast in “Muddle through”. Vinamilk’s share has been trading sideways since July 2021, as: 1) overall equity weakness due to COVID-19 outbreak in Vietnam; 2) harsh competition dairy market; and 3) the delayed production upgrade of Mocchau Milk. However, we expect that Vinamilk will step into an inflection period by end-2021 as: 1) rebound local demand for dairy products as potential well-tamed COVID-19 outbreak; 2) lower raw milk price to post a slight improvement in the gross margin; and 3) higher growth of oversea channels