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A Vinamilk production line. The price of VNM shares were almost unchanged on the stock market. VNM stood at VND121,000 per share on Tuesday.

SSI said that the share price of Viet Nam’s leading dairy firm Vietnam Dairy Products JSC (Vinamilk) increased only 0.72 per cent due to low profit in 2019.

SSI cited a Nielsen Vietnam market research report showing that the consumption of milk has started stabilising in the second quarter of 2019 after six consecutive quarters of decline.

2019’s consumption growth rate was positive but slow, reaching 2.1-3.9 per cent compared to 2018, equivalent to the consumer price index (CPI). Among fast-moving consumer goods (FMCG), dairy products, which account for 13 per cent of total FMCG consumption, is one of the commodities with poor consumption growth.

As for challenges facing the dairy industry, analysts from SSI said that revenue through modern trade channels, including e-commerce, saw double-digit growth in many quarters, but only 11 per cent in total FMCG sales.

“Selling through modern trade channels is a challenging segment for dairy companies due to fierce competition,” SSI said.

Meanwhile, raw milk prices and average selling prices both increased. According to Global Dairy Trade, the price of skimmed milk powder in 2019 increased by 30 per cent compared to last year, while the price of whole milk powder increased by 4 per cent. To ensure profit margins, products from big brands such as Vinamilk, TH True Milk and Dutch Lady increased by 1-5 per cent in price last year.

In the first nine months of 2019, Vinamilk, listed at VNM on the stock market, achieved more than VND42 trillion (US$1.8 billion) in net revenue and VND8.38 trillion in net profit, increasing by 6.4 per cent and 5.8 per cent year on year, respectively. Of the figure, domestic revenue increased by 6.1 per cent, quite close to the company's estimate of 5-7 per cent.

There is not yet a financial report for the whole year, but a Vinamilk official told Viet Nam News the company would complete targets set for 2019.

An analysis from Phu Hung Securities Joint Stock Company said that in the future, VNM might face risks of fluctuations from input material prices, direct competition from imported products, which enjoy free trade agreements, and risks of mergers and acquisitions.

On the stock market, VNM had an average price of VND117,550 per share from the first trading session on January 2, 2019 until the last trading session on December 31, 2019. — VNS

Vinamilk completes acquisition of Moc Chau Milk

Vinamilk completes acquisition of Moc Chau Milk

Vinamilk completed the purchase of 79.5 million shares in GTNFoods to increase its holdings to 75 per cent in Moc Chau Milk.