Individual

VIETNAM DAIRY PRODUCTS JSC (VNM)

November 20, 2014

INITIATE COVERAGE: BUY

Current Price (19/11/2014):

Target Price:

VND

VND

101,000

113,000

Short Term Trading Recommendation

Resistance Level

VND

Support Level

VND

Hold

108,000

104,000

Bloomberg ticker: VNM VN

Exchange: HSX

Industry:

Consumer

Beta

0.71

52w Low / High (VND)

98,500 – 121,000

Outstanding Shares (mn)

1,000

Market Cap (VND bn)

101,011

Free Float (mn shares)

574.6

6M Avg Trading Vol

173,208

Foreign-owned Ratio (%)

49%

Cash dividend

Year

EPS (TTM)

(% par)

2015F

40%

7,172

2014F

40%

6,622

2013

48%

7,835

2010 – 13

2014E

2014 - 19F

CAGR

(VND bn)

CAGR

Revenues

25%

36,021

15%

EBITDA

31%

8,697

7%

Net Income

22%

6,622

6%

Ratio

VNM

Peers

VNI

PE

17.8

18.7*

15.2

PEG

(3.9)

(1.2)

na

P/B

5.88

4.38

2.00

EBIT/I

145.33

12.68

na

EV/EBITDA

12.18

18.73

10.92

ROE

34%

13%

14%

*Peer group is not Vietnamese companies

Company Description: VNM has a full value chain from

raising cows, processing and producing a variety of dairy

products from powdered milk, condensed milk, yogurt,

soya, cheese to ice cream. Besides that, VNM also takes

part in producing soft drinks. As of September 2014, total

assets were VND23,908 billion and total equity was

VND18,122 billion.

VNM VN

30

VNINDEX

20

10

0

01/14

-10

02/14 03/14

04/14

05/14

06/14

07/14

08/14

09/14

10/14

-20

We initiate coverage of Vietnam Dairy Products JSC (VNM) with a

long-term BUY recommendation based on a target price of

VND113,000 and a dividend yield of 4%:

Leading market position: VNM is well-positioned with 50% market

share. VNM possesses a strong brand name and a distribution

network with more than 224,000 retailing points. Thanks to the

extensive distribution channels, 70% of VNM’s domestic revenue has

come from rural areas while the remaining 30% has come from large

cities.

Slowing revenue growth: From 2009 to...