External broker reports(aggregated public sources), Mirae Asset Securities

Mirae Asset Securities

External broker reports(aggregated public sources)

Leading full-service brokerage firm in Vietnam. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

Vietnam Dairy Products JSC / Equity Bottom-Up

<ul><li>According to Rabobank, global milk powder prices may have peaked in 1Q22 and are expected to decline in 2H22 (to the 2021 average level), thanks to the recovery of global milk supply and slowing demand from China as a result of lockdown policies.</li><li>Since March, Vietnam Dairy Products JSC (VNM) has fixed the price of milk powder until end-August 2022, and input costs are expected to decline from 4Q22 onwards.</li><li>In addition, the company has raised selling prices by 4%–10% YTD for certain products.</li></ul><div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

According to Rabobank, global milk powder prices may have peaked in 1Q22 and are expected to decline in 2H22 (to the 2021 average level), thanks to the recovery of global milk supply and slowing demand from China as a result of lockdown policies.Since March, Vietnam Dairy Products JSC (VNM) has fixed the price of milk powder until end-August 2022, and input costs are expected to decline from 4Q22 onwards.In addition, the company has raised selling prices by 4%–10% YTD for certain products.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Vietnam Dairy Products JSC (VNM VN Equity/ Trading Buy) - Initiation - Recovery in sight

External broker reports(aggregated public sources), Rong Viet Securities

Rong Viet Securities

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

2018 marks the third year of the 2016-2020 Socio-Economic Development Plan which concentrates on institutional reforms and business environment improvement. Throughout the special period, the stock market, seen as the barometer of the economy, will play the leading role and reflect the above positive movement. Investor sentiment strengthens because of the government’s effort in fulfilling its commitment and macroeconomic indicators’ advances. Business environment is still the key point as the government and departments have been reducing the policy burdens. In details, the Circular No.08/2018/ND-CP illustrates that the ministery of industry and trade (MOIT) intends to remove 600 out of 1,200 business rules. The ministry of agriculture and rural development is willing to ease 34% of total business rules and simplize the others. The ministry of construction said about elimination of business rules and the number of conditional business sectors. Regarding of Vietnam’s economic growth in 2018, RongViet Research forecast an annual pace of 6.7% in a basic case and 7% in a positive case. The supporters incclude: 1) The recovery of agriculture, forestry and fishing gets stronger, 2) The manufacturing sector’s growth is estimated at 12% YoY thanks to FDI companies such as SamSung, Formosa,etc and 3) The service sector (consisting of whole and retail sales; financials; insurances; transports, etc) still contributes over 50% to the GDP growth. An enviroment of low interest rate and stable foreign exchanges have been making high-return channels like stocks and real estate more attractive. The official pursuits of lower lending rates, proved by a reduce of 25 bps of OMO rate. In addition to a large amount of deposit steaming from the ministry of finance (MOF) and an encouraging inflation, whose forecasted growth is around 3.8-4% YoY in 2018, we believe that there are no diffenrent changes in interest rates in most time of 2018. Besides, the state bank of Vietnam (SBV) can actively intervene in the FX market’s movements and keep the maximum depreciation of the dong around 1-2% because of the expected third year of trade surpuls and larger foreign reserves of USD 54.5 billion recorded at the mid of January 2018. In compared with the real estate market which faces some obstacles of huge investment and limited liquidity, the stock market is expected to attract residents’ saving well. The race to upgrade the Vietnam stock market to the emerging group creates chances of high-level transparency and quality of stocks, which supports investors’ decisions. Although we don’t appreciate the possibility of that in 2018 due to quantitative factors, there are significant efforts, including 1) Adding derivative goods in 2017 and covered warrant in 2018, 2) Researches of applying T+0 rules, open-ended funds’ services and pension funds. All of them is good for the stock market of Vietnam. Based on the above agruments, 2018 is likely a good year of the stock market. Beside foreign inflow, the stock market is absorbing a large amount of saving after a 48% surge of 2017. That will be served for a bigger supply which climbs up due to SOEs’ IPO, newly listed companies and additional issuances. To be careful with money flows of open ended fund and ETFs. Indirect foreign investment keeps rising via open ended fund and ETFs from the end of 2017 to the beginning of 2018. That results in a higher participation rates of foreign investors rising from 10-11% to 15% at the end of 2017. In the January of 2018, foreign investors bought VND 8,000 billion, equivalent to 35% of total net-inflow in 2017 (excluding SAB’s divested amount). Because ETFs and open-ended funds allocate to large-cap shares of the VN30 basket, those PE surged at the beginning of 2018. At the end of January 2018, the VN30’s PE reached 19.4 times, 56% higher than mid-cap group’s PE. Due to the attractiveness, asset reallocation to large-scale stocks is likely to produce a high return in 2018. Howeve, we warns of serious risk in the case of high PE. Insteadedly, investors should be willing to filter and invest in mid-cap shares which own an encouraging PE and a bright prospect in the mid and long term. RongViet Research expects that the earning-after-tax amount of 46 non-bank companies will grow at an annal pace of 17%. Looking at 16 mid-cap shares whose market cap reaches VND 77 trillion, equivalent to 50% of total market cap of the mid-cap group, the earning-after-tax amount’s growth is estimated at 23% YoY in 2018, well above 2017’s 19% YoY growth.

2018 marks the third year of the 2016-2020 Socio-Economic Development Plan which concentrates on institutional reforms and business environment improvement. Throughout the special period, the stock market, seen as the barometer of the economy, will play the leading role and reflect the above positive movement. Investor sentiment strengthens because of the government’s effort in fulfilling its commitment and macroeconomic indicators’ advances. Business environment is still the key point as the government and departments have been reducing the policy burdens. In details, the Circular No.08/2018/ND-CP illustrates that the ministery of industry and trade (MOIT) intends to remove 600 out of 1,200 business rules. The ministry of agriculture and rural development is willing to ease 34% of total business rules and simplize the others. The ministry of construction said about elimination of business rules and the number of conditional business sectors. Regarding of Vietnam’s economic growth in 2018, RongViet Research forecast an annual pace of 6.7% in a basic case and 7% in a positive case. The supporters incclude: 1) The recovery of agriculture, forestry and fishing gets stronger, 2) The manufacturing sector’s growth is estimated at 12% YoY thanks to FDI companies such as SamSung, Formosa,etc and 3) The service sector (consisting of whole and retail sales; financials; insurances; transports, etc) still contributes over 50% to the GDP growth. An enviroment of low interest rate and stable foreign exchanges have been making high-return channels like stocks and real estate more attractive. The official pursuits of lower lending rates, proved by a reduce of 25 bps of OMO rate. In addition to a large amount of deposit steaming from the ministry of finance (MOF) and an encouraging inflation, whose forecasted growth is around 3.8-4% YoY in 2018, we believe that there are no diffenrent changes in interest rates in most time of 2018. Besides, the state bank of Vietnam (SBV) can actively intervene in the FX market’s movements and keep the maximum depreciation of the dong around 1-2% because of the expected third year of trade surpuls and larger foreign reserves of USD 54.5 billion recorded at the mid of January 2018. In compared with the real estate market which faces some obstacles of huge investment and limited liquidity, the stock market is expected to attract residents’ saving well. The race to upgrade the Vietnam stock market to the emerging group creates chances of high-level transparency and quality of stocks, which supports investors’ decisions. Although we don’t appreciate the possibility of that in 2018 due to quantitative factors, there are significant efforts, including 1) Adding derivative goods in 2017 and covered warrant in 2018, 2) Researches of applying T+0 rules, open-ended funds’ services and pension funds. All of them is good for the stock market of Vietnam. Based on the above agruments, 2018 is likely a good year of the stock market. Beside foreign inflow, the stock market is absorbing a large amount of saving after a 48% surge of 2017. That will be served for a bigger supply which climbs up due to SOEs’ IPO, newly listed companies and additional issuances. To be careful with money flows of open ended fund and ETFs. Indirect foreign investment keeps rising via open ended fund and ETFs from the end of 2017 to the beginning of 2018. That results in a higher participation rates of foreign investors rising from 10-11% to 15% at the end of 2017. In the January of 2018, foreign investors bought VND 8,000 billion, equivalent to 35% of total net-inflow in 2017 (excluding SAB’s divested amount). Because ETFs and open-ended funds allocate to large-cap shares of the VN30 basket, those PE surged at the beginning of 2018. At the end of January 2018, the VN30’s PE reached 19.4 times, 56% higher than mid-cap group’s PE. Due to the attractiveness, asset reallocation to large-scale stocks is likely to produce a high return in 2018. Howeve, we warns of serious risk in the case of high PE. Insteadedly, investors should be willing to filter and invest in mid-cap shares which own an encouraging PE and a bright prospect in the mid and long term. RongViet Research expects that the earning-after-tax amount of 46 non-bank companies will grow at an annal pace of 17%. Looking at 16 mid-cap shares whose market cap reaches VND 77 trillion, equivalent to 50% of total market cap of the mid-cap group, the earning-after-tax amount’s growth is estimated at 23% YoY in 2018, well above 2017’s 19% YoY growth.

2018 Strategy Report: "Confront the Big Waves"

Vietnam

Vietnam Dairy Products JSC produces dairy foods. The Company produces milk, condensed milk, milk powder, yoghurt, ice cream and cheese. Vietnam Dairy Products also produces cookies, coffee and tea and bottled water.

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Vietnam Dairy Products JSC (VNM VN)