VietNamNet Bridge - With the third largest population in SE Asia and 70 percent of people of working age, Vietnam has high potential for fast-moving consumer goods (FMCG) manufacturers.

The revenue of some FMCG manufacturers in 2015

This can already be seen in the prosperity of Vinamilk, the nation’s leading dairy producer, and Sabeco and Habeco, the two largest brewers, as well as Masan Consumer, each of which has annual turnover of tens of trillions of dong.

Many FMCG companies list shares on the bourse. These include beverage manufacturers such as Vinamilk (VNM), Habeco (BHN), Vinacafe Bien Hoa (VCF), and Chuong Duong (SCD), and food manufacturers such as Kido (KDC), Tuong An Vegetable Oil (TAC), Bibica (BBC), Hai Ha (HHC), Huu Nghi (HNF), Vissan (VSN) and Ha Long Canned Food (CAN). 

With the third largest population in SE Asia and 70 percent of people of working age, Vietnam has high potential for fast-moving consumer goods (FMCG) manufacturers.

The attractiveness of FMCG shares explains why the US firm Mondelez spent trillions of dong to take over Kinh Do’s sweets manufacturing unit and why Lotte and Pan Group fought each other to obtain Bibica. 

This also explains why foreign investors queued up for Vinamilk and Sabeco shares as soon as the State announced its divestment from the two companies.

However, there are not many opportunities to invest in FMCG shares. This is not because the companies have had losses, but because of the low liquidity of the shares.

CAN and HHC, for example, only have several thousands of shares traded each session. As for Bibica, two big groups of shareholders – Lotte and Pan Group – alone hold 90 percent of shares, and the amount of shares in circulation is modest. 

Similarly, Tuong An and Vinacafe Bien Hoa are being put under the control of Kido and Masan. This means there are not many shares in circulation for investors to buy. 

However, an analyst said as the number of FMCG companies to list shares on the bourse has been increasing significantly. These include well-known names such as Habeco (brewer), Vissan (meat supplier), Vocarimex (vegetable oil) and Interfoods, the company which owns the Wonderfarm brand.

The shares of the companies have been increasing considerably since they entered the bourse. Habeco, for example, saw prices increasing for eight consecutive trading sessions. 

Meanwhile, Sabeco, the brewer with the largest market share, is scheduled to enter the HCM City Stock Exchange on December 6. Sabeco’s price is relatively high on OTC market, at VND110,000 per share, while investors are believed to order Sabeco’s shares at VND170,000 per share.

A series of other big players in FMCG field will also enter the bourse in some days, including Masan Consumer and Quang Ngai Sugar, which owns Vinasoy, the soybean brand, and Cholimex Food.