Company Insight

Vietnam Dairy Product JSC (Vinamilk, HOSE: VNM) is a dairy company with the leading market share along with the largest distribution system and cow herds in Vietnam. Besides, the business is also continuously expanding to large territories such as China and the Middle East. At the current market price, VNM deserves to be considered as an investment opportunity for the following reasons: (1) High dividend payout ratio and healthy financial ability to meet the expanding investment needs in the future, (2) Growth drivers come from export markets and overseas companies and (3) Growth room in Vietnam's dairy industry is still attractive as the compound growth is forecasted at 4.1%/year in 2024-2028 (according to Euromonitor) and milk consumption per capita is still low compared to other Southeast Asia countries, despite barriers to production expansion and heavy dependence on imported raw materials. 

Based on the FCFF and P/E methodologies, we update our valuation and recommend BUY on VNM with a target price of VND 75,000, equivalent to an expected return of 24.2%.