Summary of the 9M/2019 results of Vinamilk JSC (VNM VN)
9M/2019 results: highlights
- Overall revenue increased by 6.4% y/y. Turnover on the domestic market, which contributed 85.1% to VNM’s total sales, rose by 5.8% y/y. Oversea subsidiaries delivered 9.6% higher sales. Direct exports rose by 10.2% y/y.
- VNM’s gross profit increased by 7.8% y/y. The gross margin expanded by 70bps y/y, reaching 47.3%. The good result was due to a combination of increasing average selling prices and lower raw material prices. Moreover, VNM’s selling and administration expenses as a % of sales remained unchanged during this period. Overall, the company’s net profit was higher by 5.8% y/y.
- VNM’s financial position stayed solid. Cash and cash equivalents accounted for 28.1% of total assets. The company’s leverage remained moderate with a D/E and a D/A of 0.15x and of 0.11x respectively.
- As for all 2019, we forecast VNM’s total sales to rise by 6.3% y/y. Sales on the domestic and exports market are estimated to increase by 5.7%, and 6.6% y/y respectively. VNM’s continuous expansion of its overseas business is likely to continue to bear fruit with an expected sales growth of 13.1% in 2019.
- For the period of 2020 until 2023, we forecast a CAGR of 5.1% for the company’s net sales. We estimate VNM’s overall bottom line to grow by a CAGR of 5.8% during this period, and the company should be able to maintain a robust net margin at 19.4%.
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