- 2024-10-31T00:00:00
- Company Research
- 9M 2024: Net sales increased 3% YoY and NPAT-MI was VND7.3tn (+11% YoY), both of which complete 72% our respective full-year forecasts and slightly trail our expectations.
- Q3 2024: Net sales slid by 1% YoY as domestic sales dropped 2% YoY, which we partly attributed to damage from Typhoon Yagi in northern Vietnam, a region where VNM has strong sales exposure. As a result, total GPM declined by 70 bps YoY to 41.2% and NPAT-MI declined 4% YoY in Q3. Conversely, sales from the overseas market (i.e., Export (mainly to the Middle East), Driftwood (US), and Angkor Milk (Cambodia)) grew 9% YoY, with corresponding GPM growing 3.6 ppts YoY.
- Domestic sales: In Q3 2024, VNM’s parent domestic sales (excluding MCM – VNM’s indirect subsidiary) declined 3% YoY. In contrast, MCM’s sales declined 9% YoY. This is because MCM’s main market is the northern mountainous region, which suffered severe damage from Typhoon Yagi. In 9M 2024, VNM’s total domestic sales increased 1% YoY.
- Overseas market: Combined sales from overseas subsidiaries — including Driftwood (US) and Angkor Milk (Cambodia) — grew 8% YoY in Q3 2024. Export revenue increased 10% YoY in Q3 2024. In 9M 2024, total sales from the overseas market increased 16% YoY, mainly driven by export sales as VNM has benefited from the exit of competitors from Iraq due to political instability along with consistent demand in the country. Total GPM of overseas market increased 5.9 ppts YoY in 9M 2024.
- Profitability: In 9M 2024, total GPM improved 1.4 ppts YoY to 42%, mainly due to strong expansion of GPM in overseas business. This is partly offset by a 30-bps YoY increase in SG&A/sales to finance active marketing activities in 9M. In Q3, VNM introduced a range of new products in its liquid milk and yogurt lines. Additionally, the company refreshed its nut milk, ice cream, and beverage categories through repackaging efforts.
- Our view: We see potential downside risk to our 2024F NPAT-MI for VNM as 9M 2024 results slightly trail our forecasts. Nonetheless, VNM's resilient marketing efforts focused on high-margin categories in 9M 2024 align with our expectations. We believe this will support an improvement in overall GPM, which we forecast to improve to 42.9% in 2026 from 41.9% in 9M 2024.
VNM’s Q3 and 9M 2024 results
VND bn | Q3 2023 | Q3 2024 | YoY | 9M 2023 | 9M 2024 | YoY | 2024F | 9M 2024 as % of 2024F |
Net revenue | 15,637 | 15,537 | -1% | 44,750 | 46,306 | 3% | 64,454 | 72% |
| 13,253 | 12,928 | -2% | 37,532 | 37,957 | 1% | 52,988 | 72% |
| 2,384 | 2,609 | 9% | 7,218 | 8,348 | 16% | 11,466 | 73% |
Exports | 1,246 | 1,375 | 10% | 3,741 | 4,411 | 18% | 6,076 | 73% |
Driftwood & Angkor Milk | 1,138 | 1,234 | 8% | 3,477 | 3,937 | 13% | 5,390 | 73% |
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Gross profit | 6,555 | 6,401 | -2% | 18,103 | 19,380 | 7% | 27,383 | 71% |
| 5,634 | 5,299 | -6% | 15,439 | 15,804 | 2% | 22,483 | 70% |
| 921 | 1,102 | 20% | 2,664 | 3,576 | 34% | 4,900 | 73% |
Exports | 699 | 822 | 18% | 2,014 | 2,674 | 33% | 3,659 | 73% |
Driftwood & Angkor Milk | 222 | 281 | 27% | 650 | 903 | 39% | 1,241 | 73% |
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SG&A expenses | -3,815 | -3,758 | -1% | -10,776 | -11,280 | 5% | -15,839 | 71% |
EBIT | 2,740 | 2,643 | -4% | 7,327 | 8,101 | 11% | 11,544 | 70% |
Net financial income | 374 | 333 | -11% | 903 | 903 | 0% | 1,158 | 78% |
NPAT-MI | 2,492 | 2,404 | -4% | 6,548 | 7,269 | 11% | 10,045 | 72% |
Gross margin | 41.9% | 41.2% |
| 40.5% | 41.9% |
| 42.5% |
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| 42.5% | 41.0% |
| 41.1% | 41.6% |
| 42.4% |
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| 38.6% | 42.3% |
| 36.9% | 42.8% |
| 42.7% |
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Exports | 56.1% | 59.8% |
| 53.8% | 60.6% |
| 60.2% |
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Driftwood & Angkor Milk | 19.5% | 22.7% |
| 18.7% | 22.9% |
| 23.0% |
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SG&A/net sales | 24.4% | 24.2% |
| 24.1% | 24.4% |
| 24.6% |
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EBIT margin | 17.5% | 17.0% |
| 16.4% | 17.5% |
| 17.9% |
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NPAT-MI margin | 15.9% | 15.5% |
| 14.6% | 15.7% |
| 15.6% |
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Source: VNM, Vietcap
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