VNM Flash Note- BUY

The company returned to EAT growth at 4.5% YoY in 3Q2025, in line with our expectations and shrinking the dip in 1H. We maintain our EAT projection at VND9,156bn (-3.1% YoY) for 2025 and move our target price for the stock to YE2026, at VND71,700/share, equivalent to a total return of 31.2%. Rating BUY.

Net revenue and EAT rose by 9.1% YoY and 4.5% YoY in 3Q2025, bringing VNM’s 9M2025 figures to VND46,612bn (+0.7% YoY) and VND6,586bn (-9.8% YoY), respectively. Sales of finished goods, responsible for 97% of the total, soared by 11.6% YoY in 3Q, outperforming our projections, and 1.9% YoY in 9M.

Domestic revenue grew by 7% YoY in 3Q despite still falling slightly by 1% YoY in 9M to VND34,963bn, accounting for 79% of VNM’s sales of finished goods. The rise was underpinned by improved consumer demand coupled with the company’s digital transformation, re-branding activities, acceleration of its presence in the modern online and retail channels – though the traditional channel is still dominant in sales. The expansion and renovation of Vinamilk store network (reaching 700+ stores as of 9M2025) have created positive effects in fostering the company’s product visibility and direct engagement with consumers, contributing to boosting other sales channels.

A 32.6% YoY jump in overseas revenue in 3Q (25.7% YoY on an FX-neutral basis) came as a result of strong performance in such markets as Asia and Africa, particularly soared demand in Cambodia amid border tension. Both direct exports and overseas subsidiaries generated stunning growth, at 46.9% YoY and 16.6% YoY respectively. For 9M, overseas revenue grew by 13.7% YoY to VND9,494bn, capturing 21% sales of finished goods, with 58% coming from direct exports and the rest from overseas subsidiaries.

The EAT climbing by 4.5% YoY in 3Q fueled by a slightly widened gross margin (+0.6ppt) and lower SG&A to net revenue ratios (-0.4 ppt) on the back of improved sales volume. The growth could have been much higher if having not recognized a loss of VND194bn from affiliates – owing to a one-off provision for Miraka (New Zealand).

We maintain our EAT projection at VND9,156bn (-3.1% YoY) for 2025, with 4Q results materially benefiting from a low base last year. The EAT growth is expected at 9.6% YoY in 2026 largely driven by the base effect in 1Q2025. Combining DCF and PER methods, our target price for VNM by YE2026 is VND71,700/share.