Upgrade to BUY from HOLD and lift TP to VND80,500
We upgrade to BUY from Hold rating for Mocchau Dairy Cattle Breeding JSC. or Mocchau Milk (MCM VN) and raise TP by +28.8% to VND80,500 (a potential return of +34.6%). We believe that there will be more space to improve profit margins of the company, leading to higher earnings growth from our previous forecast in the Aug 31st “Cooling down strain” report. Our upgrading was mainly driven by: 1) more supports from Vinamilk; and 2) potential stable sugar price in 2022 – the key laggard of reducing 2021F profit margins. Based on our improving earnings forecast, we believe that the current share price of Mocchau Milk provides an attractive entry point.
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