VNM [OUTPERFORM +16.3%] - Higher marketing expenses to help regain market share

- We raise our target price (TP) for VNM by 1% to VND76,500/share and maintain our OUTPERFORM rating.

- Our higher TP is mainly driven by increasing our aggregate 2026F-28F NPAT-MI by 3%, which is partly offset by decreasing aggregate 2024F-25F by 4%. This was because we increase our aggregate 2024-25F selling expenses by 7% as we expect higher marketing spending from the company to facilitate VNM’s repositioning activities, particularly in the liquid milk and infant formula segment. We believe this will support VNM to gradually gain market share in the following years.

- We hold VNM's superior profitability and solid dividend payments in high regard. We forecast 2024F-28F sales CAGR of 5% for VNM, driven by the rising disposable income of Vietnamese as the labor market recovers. Additionally, we forecast EPS CAGR at 9% in 2024F-28F.