VNM prices had increased again in the last two years. After falling to the VND64,000 per share threshold, VNM price bounced back to VND69,000 per share.

The cash flow to VNM is relatively strong, reaching VND800 billion at some sessions. The phenomenon has caught the attention of investors, who question if the leading company in the F&B sector can regain its No1 position.

In recent years, VNM could no longer attract big cash flow, while foreign investors sold more than they bought. Its prices tended to decrease and so did the capitalization value.

Vinamilk, which was the King in the F&B sector on the bourse, has been outpaced by Masan Consumer (MCH), a consumer goods manufacturing group owned by billionaire Nguyen Dang Quang. 

While MCH prices keep increasing, VNM tends to get weaker. The former saw the price increasing from VND90,000 per share in early 2024 to VND222,800 per share on June 11, which meant a 150 percent increase. Masan Consumer’s capitalization has reached VND160 trillion, or $6.5 billion.

Meanwhile, VNM price dropped to VND66,600 per share as of June 11, the price level seen earlier this year. Its capitalization has fallen to VND139 trillion, or $5.5 billion.

In the last two months, VNM bounced back after bottoming out at VND64,000 per share. However, if considering the VNM price performance for a longer time, analysts say that VNM is in an obvious downtrend period.

In early October 2017, VNM equivalent price was VND110,000 per share, which meant capitalization of $10 billion, with which it was listed among the top 10 businesses with the highest capitalization values in the stock market.

But the dairy producer has been excluded from the group. Its capitalization value has dropped by $4.5 billion compared with the figure in the golden days.

Foreign investors’ net sales are believed to have put pressure on VNM, forcing prices down. On June 11, the net sale was VND107 billion.

Since the beginning of the year, VNM has been listed among the shares with highest net sales. VNM is no longer a favorite share for foreign financial investors, including Dragon Capital, VinaCapital and Pyn Elite Fund.

After the 2012-2017 boom period, Vinamilk has witnessed its annual revenue hovering around VND60 trillion, with no growth in recent years. Its profit was always above VND10 trillion a year in 2017-2021, but dropped to VND8.5 trillion in 2022 and VND8.87 trillion in 2023. 

Prospects

In 2023, Vinamilk’s profit saw positive growth after two years of negative growth. However, the growth rate was modest.

The growth slowdown is attributed to weak demand in the domestic market and strong competition from other brands. Recently, the dairy producer tried to boost exports to many markets, including Asia and the Middle East. Though export turnover has increased sharply, total revenue has not been improved significantly.

Vinamilk is trying to enter new markets, including South America, the Caribbean, and West and South Africa, hoping that this will help increase revenue from foreign markets.

Though difficulties still exist, Vinamilk has begun seeing positive signs. It reported strong growth in most products despite the slight decrease in the dairy industry.

It reported a 1.4 percent growth rate in revenue in the first quarter over the same period last year to VND14.1 trillion, while its post-tax profit increased by 16 percent to VND2.2 trillion. The noteworthy sign was the 6 percent growth rate in exports, plus good signs from the Chinese market.

Some securities companies have predicted that Vinamilk is likely to see its profit grow in 2024 thanks to recovery in demand.

However, according to analysts, Vinamilk can hardly regain the strength it had many years ago. Within 20 years after equitization in 2003, Vinamilk saw revenue increase by 15 times and profit by 13 times.

Vinamilk is still leading the liquid milk market with 50 percent of market share at the end of 2023. However, the figure was lower than the 55 percent share in 2018.

The nation’s leading dairy producer now has to compete with strong rivals, including TH Milk, NutiFood, Nestle, Dutch Lady, VitaDiary and Vinasoy. 

Manh Ha