Managerial Finance II
VINAMILK JOIN-STOCK COMPANY RESEARCH
Dr. Nguyen Tung Nguyen Hong Nhung Phan Anh Tuan Le Hoang Thu Le Vu Thu Trang
26th August, 2011 FIN 332 - Troy Spring Page 1
Key statistic of company:
Listing Information Status IPO date VND’ Share Price 53,000 Summary Par value 10.0 52-week high % change (down) 52-week low % change (up) Share Volume Summary Average 30 days trading volume Capitalization Book value Market capitalization Ownership State FPT BoD, BoM, Supervisory Board Staff Others Key Financial Data (FY07) Total assets (m) Total liabilities (m) Revenues (m) NPAT (m) EPS ROA ROE Joint-stock Company 19/02006 US$ 2.54 0.48 119,000 n/a 82,500 n/a Million 58,389 VNDm 3,708,255.5 44,115,877.5 4 Shares (m) 21.26 18.76 1.09 0.33 1.00 VND 146,99,418 3,376,246 10,168,388 10,830 8.73% 11.93% % 50.08 44.19 2.56 0.8 2.37 US$ US$m
P/E Debt/Equity ratio Dividend yield
10.99 0.0 n/a
FIN 332 - Troy Spring
Established in 1976, Vinamilk has maintained a dominant position in Vietnam’s dairy sector with over 30 years of operational history. Its traditional product is the ‘Longevity’ brand of condensed milk. Vinamilk expanded its product range by introducing powdered milk and cereal products in 1988 and launching UHT milk and yoghurt in 1991. The Group was equitized in 2003 and subsequently listed on HOSE on 19 January 2006. Throughout the years, Vinamilk has expanded its production capacity by acquisition and construction of new plants around the country. At present, the Group operates nine dairy factories with a total capacity of 504 thousand tons per year and one coffee factory with a capacity of 1,500 tons of instant coffee and 6,000 tons of roasted ground coffee.
The largest player in the domestic dairy market The Group is the largest dairy producer in Vietnam, capturing around 37.0% of the market share in the domestic dairy market. In terms of product segments, the Group accounted for nearly 85.0% of the market share in the yoghurt and condensed milk segment; and around 45.0% of the market share in the liquid milk segment in 2008. These segments jointly contributed to around 68.0% of its total revenue in 2008. Besides that, Vinamilk’s powdered milk-infant cereals segment accounted for about 29.0% of its total revenue in 2008. The management has set an ambitious target to expand the market share of this segment from 15.0% in 2008 to at least 35.0% over the next two years. Strong brand name Over the years, the Group has built a reputable brand name for its major products. Its highly-popular brand, ‘Vinamilk’, is viewed by many domestic consumers as the most trusted brand for nutritional dairy products. The Group is ranked first in ‘The Top Ten High-Quality Vietnamese Goods’ from 1995 to 2009. According to AC Nielsen, Vinamilk’s contributions in the ‘favorite brand index’ and the ‘brand-used most-often index’ have increased by 14% and 12% y-o-y, respectively, in 2008. Extensive nationwide distribution network Vinamilk has established the largest distribution network compared to its sector’s peers. The Group has 250 distributors selling its products to 125,000 retail outlets covering 64 provinces in Vietnam. This traditional distribution channel accounted for 80.0% of the Group revenue last year. Its modern distribution network through hypermarkets and supermarkets contributed to about 12.0% of the Group’s total revenue, while the remaining 8.0% of its revenue comes from hotels, restaurants, and cafeterias (Horace). Besides that, Vinamilk has consistently been reaching out to assist its distributors in order to strengthen its foothold. The Group has invested in 7,000 fridges, coolers for chilled products and 300 mini-vans to support distributors last year....