Company Insight

Vietnam Dairy Products JSC (Vinamilk, HOSE: VNM) is the dairy company with the leading market share in Vietnam along with the largest distribution system and cow herd. In addition, the company is also continuously expanding to large territories such as China and the Middle East. At the current price, VNM is a worthy investment to consider because: (1) High dividend payout ratio and strong financial potential are enough to meet future expansion investment needs, (2) Growth momentum comes from export markets and overseas companies and (3) Growth potential in Vietnam's dairy industry is still there when the compound growth is forecast at 3.0%/year in the period 2025-2029 (according to Euromonitor 2024) and milk consumption per capita is still low compared to other countries in the Southeast Asian region, although there are still many barriers to expanding production and heavy dependence on imported raw materials. 

Based on the FCFF and P/E methods, we update our valuation and recommend BUY for VNM with a target price of VND 72,700, equivalent to an expected return of 30.8%.