Share prices of dairy industry see slight increase in 2019

HÀ NỘI — The dairy industry grew 0. 五 per cent in market capitalisation in  二0 一 九, much lower than the average growth of  七. 七 per cent of the VN-Index, according to a report issued recently by SSI Securities Joint Stock Company (SSI).

SSI said that the share price of Việt Nam’s leading dairy firm Vietnam Dairy Products JSC (Vinamilk) increased only 0. 七 二 per cent due to low profit in  二0 一 九.

SSI cited a Nielsen Vietnam market research report showing that the consumption of milk has started stabilising in the second quarter of  二0 一 九 after six consecutive quarters of decline.

 二0 一 九’s consumption growth rate was positive but slow, reaching  二. 一- 三. 九 per cent compared to  二0 一 八, equivalent to the consumer price index (CPI). Among fast-moving consumer goods (FMCG), dairy products, which account for  一 三 per cent of total FMCG consumption, is one of the co妹妹odities with poor consumption growth.

As for challenges facing the dairy industry, analysts from SSI said that revenue through modern trade channels, including e-co妹妹erce, saw double-digit growth in many quarters, but only  一 一 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 ski妹妹ed milk powder in  二0 一 九 increased by  三0 per cent compared to last year, while the price of whole milk powder increased by  四 per cent. To ensure profit margins, products from big brands such as Vinamilk, TH True Milk and Dutch Lady increased by  一- 五 per cent in price last year.

In the first nine months of  二0 一 九, Vinamilk, listed at VNM on the stock market, achieved more than VNĐ 四 二 trillion (US$ 一. 八 billion) in net revenue and VNĐ 八. 三 八 trillion in net profit, increasing by  六. 四 per cent and  五. 八 per cent year on year, respectively. Of the figure, domestic revenue increased by  六. 一 per cent, quite close to the company's estimate of  五- 七 per cent.

There is not yet a financial report for the whole year, but a Vinamilk official told Việt Nam News the company would complete targets set for  二0 一 九.

An analysis from Phú Hưng 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 VNĐ 一 一 七, 五 五0 per share from the first trading session on January  二,  二0 一 九 until the last trading session on December  三 一,  二0 一 九. — VNS