X-Stock | VNM VND78,000 +13%: Double-Digit Growth Expected

INVESTMENT THESIS

In 2026, BSC expects VNM to record 11% YoY earnings growth, supported by: (1) milk powder prices declining by 12% YoY; and (2) domestic market share being protected following the completion of its repositioning strategy. In addition, new products have been well received by the market and are recording strong growth on e-commerce channels.
Compared with our previous report, BSC raises its target P/E multiple from 16.5x to 17.5x due to: (1) expected 2026 growth of 11% YoY, supported by lower input material costs and protected market share; and (2) the 17.5x P/E level being equivalent to the 2023–2024 period, when VNM recorded a recovery in both revenue and profit. The WATCH recommendation mainly reflects that VNM’s share price has increased by 26.7% since BSC’s initial recommendation on November 4, 2025, partly pricing in the company’s 2026 outlook.

EARNINGS UPDATE

Q4/2025 results: Net revenue and NPAT-MI reached VND17,034bn (+10% YoY) and VND2,840bn (+34% YoY), respectively. Key highlights include:

• Net revenue growth was led by the domestic market, which reached VND13,846bn (+8% YoY), supported by protected market share after the completion of the repositioning strategy and the expansion of modern trade channels. This helped reduce dependence on traditional sales channels, such as agency-based and multi-tier retail models, while also enabling VNM to capture market share as small retailers faced difficulties with tax declaration requirements. In addition, export markets reached VND1,579bn (+26% YoY), while overseas subsidiaries recorded revenue of VND1,610bn (+16% YoY), both posting positive growth from a low base in the same period last year, as the Cambodia market recovered and the company maintained its position in the Middle East.
• NPAT-MI increased by 34% YoY, supported by: (1) gross margin reaching 40.4%, up 0.3 ppts YoY, as VNM raised prices for selected product lines to offset higher raw material costs in 2025; and (2) the SG&A/revenue ratio declining by 3.3 ppts YoY, mainly due to lower advertising expenses after the completion of the repositioning strategy.

Overall, for full-year 2025, VNM recorded net revenue and NPAT-MI of VND61,783bn (+3% YoY) and VND9,410bn (+0% YoY), respectively, in line with BSC’s expectations and completing 102% and 103% of our forecasts in the latest report.