Company Insight

Update BUY rating, target price at 73,700 VND

Vietnam Dairy Products JSC (Vinamilk, HOSE: VNM) is the leading dairy company in Vietnam, boasting the largest distribution network and dairy herd in the country. Besides leading market shares across most segments, VNM also possesses a healthy asset structure, and consistent dividend payment policy. It recently announced Q1/2026 business results, showing a significant year-on-year increase in revenue, thanks to contributions from both domestic and international markets. Based on the FCFF and P/E methods, we update our valuation and recommend BUY rating with a target price of VND 73,700, representing an expected return of 26%. We believe the current P/E ratio around 13x is quite attractive for buying a stock with a consistent dividend payment policy like VNM, with an expected dividend yield of 7.4% based on the current price.

Q1/2026 business results update

In Q1/2026, VNM recorded consolidated net revenue of VND 16,149 billion (-5.2% QoQ, +24.8% YoY), with both domestic and international markets contributing to the growth. Specifically, revenue from the domestic market reached VND 12,080 billion (-12.8% QoQ, +20.7% YoY), accounting for 75% of total revenue and showing strong YoY growth thanks to: (1) a low base in Q1/2025 due to distribution system restructuring causing disruptions to sales, and (2) a more efficient product portfolio structure that boosted revenue growth. Revenue from the international market reached VND 4,069 billion (+27.6% QoQ, +39.2% YoY) and continued to set new record highs.

Net profit reached VND 2,458 billion (-13.1% QoQ, +54.9% YoY) in Q1/2026 thanks to a YoY decrease in the SG&A expense margin (reaching 25.9%, equivalent to a decrease of 1.9 percentage points), however, it was higher than the previous quarter, reflecting the increase in promotional and advertising expenses as this year marks Vinamilk's 50th anniversary. However, we also note that, according to the management's perspective, the goal remains to keep the full-year SG&A expense margin no higher than the previous year.