HSC estimates Vinamilk shares worth $6.70

According to HSC, Vinamilk’s shares are valued at VND152,000 ($6.7), higher than the current price of VND130,000 ($5.7). A representative from HSC, however, told that its price is only a forecast based on the price of raw milk and may change.

Vinamilk owns ten farms around the country with over 17,000 heads of cattle. HSC estimates that, in 2016, its farms supplied 42,654 tons of raw milk, up 13 per cent and contributing 7 per cent of the company’s raw milk input.

HSC also estimates that Vinamilk’s total raw milk from its farms and from buying from dairy farmers reached 221,433 tons in 2016, up 10.6 per cent against 2015. Net revenue is expected to reach over VND53.1 trillion ($2.3 billion) this year, up 13.6 per cent, and after-tax profit VND10.1 trillion ($444.4 million).

According to HSC, Vinamilk will maintain stable growth thanks to the potential of its core business. It can maintain double-digit revenue growth in 2017 and the dairy sector will continue to grow at an average rate of over 10 per cent.

It forecast that Vinamilk’s average annual growth rate in net sales from 2017 to 2020 will be 10.9 per cent and after-tax profit 9.3 per cent.

Vietnam’s largest dairy producer began operating the country’s first-ever organic dairy farm under European standards in the central highlands province of Lam Dong on March 14.

The farm has investment capital of $8.7 million, is certified by the Netherlands-based global network of inspection operations, Control Union, and has a herd of 500 imported cows. “We apply close monitoring measures to ensure the herd only produces high-quality milk,” said Ms. Mai Kieu Lien, Vinamilk’s CEO.

The farm reflects the company’s commitment to clean and sustainable production, she added, with Vinamilk wishing to make high-quality products available to Vietnamese consumers at reasonable prices.

Vinamilk’s revenue was estimated at $2 billion in 2016, up 15 per cent compared to 2015. Pre-tax profit stood at VND11.2 trillion ($492.8 million) and after-tax profit VND9.3 trillion ($409.2 million).

It targets revenue of $3 billion this year. If reached, Vinamilk would break into the Top 50 milk producers in the world.