- VNM released its 9M 2022 results, including revenue of VND44.9tn (USD1.8bn; -0.5% YoY) and NPAT-MI of VND6.6tn (USD271mn; -20.3% YoY), completing 71% and 68% of our respective full-year forecasts and behind our expectations. As such, we see potential downside risk to our earnings forecast for VNM, pending a fuller review. In Q3 2022, VNM’s revenue was VND16.1tn (USD656mn; -0.7% YoY) with NPAT-MI of VND2.3tn (USD94mn;
-21.4% YoY).

- According to NielsenIQ, value growth of milk-based products was in the mid-single digits in 9M 2022 vs low-single digit in H1 2022 when 9M 2021 growth was flat YoY. We believe consumer spending on milk-based products has not fully recovered from COVID-19’s impact in 2021 as well as inflationary pressures in H1 2022, but it modestly improved QoQ in Q3 2022. Additionally, 9M 2022 gross margin remained under siege due to rising input costs. That said, we expect to see gross margin improvement starting in Q4 2022 as commodity prices slump — especially milk powder.