- 2024-01-31T00:00:00
- Company Research
- 2023 results: Net sales inched up 1% YoY to VND60.4tn and NPAT-MI grew 4% YoY to VND8.9tn, both of which fulfilled 100% of our respective full-year forecasts. According to Nielsen IQ, Vietnam’s FMCG value increased 2% YoY and the value of milk-based products slid 1% YoY in 2023.
- Q4 2023: Net sales increased 4% YoY and NPAT-MI rose 24% YoY on the back of a low base for VNM’s GPM in Q4 last year. On the other hand, Vietnam’s FMCG value declined 3% YoY and the value of milk-based products dropped 5% YoY in Q4, per Nielsen.
- Domestic sales: VNM’s parent domestic sales (excluding MCM – VNM’s indirect subsidiary) slid 1% YoY in 2023, which is in line with the trend of Vietnam’s dairy sector value reported by Nielsen as above. VNM’s parent domestic sales were flat YoY in Q4, while Vietnam’s dairy sector value dropped YoY in the quarter, which was thanks to VNM’s growth of condensed milk and yogurt. Its market shares were stable across all categories in Q4 vs Q3.
- Overseas market: Combined sales from overseas subsidiaries — including Driftwood (US) and Angkor Milk (Cambodia) — grew 7% YoY in 2023. In Q4 2023, overseas businesses’ sales increased 5% YoY and advanced 9% QoQ. Export revenue increased 4% YoY in 2023. In Q4, export sales rose 19% YoY on the low base of Q4 last year and improved 4% QoQ.
- Profitability: GPM improved 80 bps YoY in 2023 thanks to the YoY decline in input milk costs. Nonetheless, operating margin slid 10 bps YoY to 16.2% in 2023, which is lower than our full-year forecast of 16.7% due to (1) lower-than-expected domestic GPM and (2) higher-than-expected advertising and outside service expenses. In 2023, VNM’s parent advertising and outside service expenses grew 9% and 22% YoY, respectively, which is in line with its active marketing activities after the launch of its rebranding in July 2023. NPAT-MI margin is relatively in line with our forecast thanks to VNM’s higher-than-expected net financial income.
- Our view: VNM’s 2023 results are broadly in line with our forecasts in terms of top and bottom line. We currently see no material change to our 2024F forecast, pending a fuller review.
VNM’s Q4 and 2023 results
VND bn | Q4 2022 | Q4 2023 | YoY | 2022A | 2023A | YoY | 2023F | 2023A as % of 2023F |
Net revenue | 15,069 | 15,619 | 4% | 59,956 | 60,369 | 1% | 60,231 | 100% |
| 12,800 | 13,085 | 2% | 50,704 | 50,617 | 0% | 50,419 | 100% |
| 1,088 | 1,298 | 19% | 4,828 | 5,039 | 4% | 5,078 | 99% |
| 1,181 | 1,236 | 5% | 4,424 | 4,713 | 7% | 4,734 | 100% |
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Gross profit | 5,846 | 6,442 | 10% | 23,897 | 24,545 | 3% | 24,678 | 99% |
| 5,027 | 5,455 | 9% | 20,556 | 20,894 | 2% | 21,008 | 99% |
| 604 | 738 | 22% | 2,585 | 2,752 | 6% | 2,770 | 99% |
| 214 | 249 | 16% | 756 | 898 | 19% | 901 | 100% |
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SG&A expenses | -3,784 | -3,998 | 6% | -14,144 | -14,774 | 4% | -14,590 | 101% |
EBIT | 2,062 | 2,444 | 19% | 9,753 | 9,771 | 0% | 10,089 | 97% |
NPAT-MI | 1,869 | 2,326 | 24% | 8,516 | 8,874 | 4% | 8,898 | 100% |
Gross margin | 38.8% | 41.2% |
| 39.9% | 40.7% |
| 41.0% |
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| 39.3% | 41.7% |
| 40.5% | 41.3% |
| 41.7% |
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| 55.5% | 56.8% |
| 53.5% | 54.6% |
| 54.5% |
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| 18.2% | 20.1% |
| 17.1% | 19.1% |
| 19.0% |
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SG&A/net sales | 25.1% | 25.6% |
| 23.6% | 24.5% |
| 24.2% |
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EBIT margin | 13.7% | 15.6% |
| 16.3% | 16.2% |
| 16.7% |
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NPAT-MI margin | 12.4% | 14.9% |
| 14.2% | 14.7% |
| 14.8% |
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Source: VNM, Vietcap
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