Bright prospects for Vietnam consumer goods stocks
With consumption expected to recover in the second half of 2024, a brighter macro situation, salary increases, and value added tax cuts, consumer goods businesses are forecast to see improved profits on top of their Q1 growth.

Consumers shop goods at a supermarket. Photo by The Investor/Trong Hieu.
Macro data in May showed that the manufacturing and processing index was recovering in most industry groups, while imports recorded faster growth than exports, a positive signal for the upcoming export peak season. However, consumption remained slow and was lower than the growth rate posted pre-Covid-19.
According to the General Statistics Office, total retail sales of consumer goods and services in May were estimated at VND519.8 trillion ($20.42 billion), up 9.5% over the same period last year. The figure in the first five months reached VND2,580 trillion ($101.36 billion), a year-on-year increase of 8.7%, compared to a 12.3% rise in the same period last year.
SSI Research, under leading brokerage house Saigon Securities Inc., said consumption had failed to make a breakthrough in May, recording a decrease of 0.1% compared to the previous month. Meanwhile, retail sales of goods and services in April were down 0.4%, showing that consumption during the National Reunification-May Day holiday had failed to pick up.
However, the economic recovery, salary reform and the extension of VAT reductions by six months to the year-end are likely to have a positive impact on domestic consumption in the second half of this year, offering bright prospects for stocks in consumer goods companies.
Positive results
In a recent meeting, dairy giant Vinamilk, listed on the Ho Chi Minh Stock Exchange (HoSE) as VNM, announced respective preliminary domestic revenue growth rates of 10% and 6% in April and May over the same period last year, exceeding market expectations. Its export revenue also rose 16%, much higher than the 5.9% posted in Q1.
In the first five months, its total revenue increased by 4%, of which domestic revenue expanded 3% and exports 20%. SSI believed that this showed positive prospects in Q2 for the dairy giant. Vinamilk’s revenue in Q3, its peak sales season, is also expected to improve as consumer sentiment gradually recovers.
The board of directors also revealed they had fixed prices of input milk powder until the end of 2024 at more attractive rates compared to 2023 and Q1/2024. Therefore, the gross profit margin of 41.9% in Q1 should be maintained throughout the year and the firm could achieve double-digit profit growth.
At the recent AGM, leaders of food maker Kido (HoSE: KDC) expressed their confidence in completing this year's ambitious business plan, with revenue of VND13 trillion ($510.75 million), a year-on-year increase of 50%, and before-tax profit of VND800 billion ($31.43 million), 2.5 times higher than 2023. The driving force comes from the prospects of an economic recovery and the company's production advantages and widespread distribution network.
The firm now ranks second by market share in the cooking oil industry in Vietnam, with prominent brands such as Tuong An, Marvela and Olita, and is the number one player in the margarine industry with a market share of 74.9%.
Last year, it acquired Tho Phat Dumplings, which holds the leading position in the field of production of dumplings and steamed buns, with its 37-year presence in the market.
Kido will reposition the Tho Phat and My Huong brands, diversify product lines, expand its market to the central and northern regions, and build a system of 1,000 agents and 50,000 points of sale nationwide. At the same time, the group will develop the miniBAO chain with 12,000 steamed bun stores.
In addition, the group has entered Vietnam's spice market, which is worth up to VND60 trillion ($2.36 billion). Despite being affected by an alcohol ban while driving, brewery Sabeco (HoSE: SAB) showed signs of a recovery in Q1/2024, with revenue climbing 15.6% to VND7.19 trillion ($282.46 million) and after-tax profit inching up 2% to VND1.02 trillion ($40.07 million).
SSI Research believed that Sabeco could record double-digit profit growth in Q2 when both the 2024 European Football Championships and the 2024 Summer Olympics take place. At the same time, Q2/2023 set a low comparative base.
In Q1, most consumer goods businesses enjoyed positive results. Quang Ngai Sugar Joint Stock Company (QNS) reported a profit increase of 68% to VND532 billion ($20.9 million), Kido turned a loss of VND319 billion into a profit of VND10 billion, and Vinamilk saw its profit expand 18% to VND2.2 trillion.
Going against this upward trend, retail giant Masan Group (HoSE: MSN) reported its Q1 net profit halved to VND104 billion ($4.08 million) due to the unsatisfactory business results of Masan High-Tech Materials Corp (UPCoM: MSR) with a net loss of VND718 billion.
In a May 30 announcement, Masan said Mitsubishi Materials Corporation (MMC) Group will acquire 100% of H.C. Starck Holding (Germany) GmbH (HCS) from MSR for an equity purchase price of $134.5 million.
The transaction proceeds will be used to reduce MSR’s outstanding debt balance, consistent with Masan Group’s target to reduce net debt to earnings before interest, taxes, depreciation, and amortisation to below 3.5x.
Masan is expected to report a one-time profit gain of approximately $40 million as a result of the transaction and benefit from long-term net profit after a tax uplift of $20-30 million.
SSI Research believed that in the short term, improved Q2 profits, information related to cash dividends, the HoSE listing of Masan Consumer Corp (MCH), and the divestment from HCS should support MSN stock prices. In the long term, Masan Group could represent Vietnam's consumption and retail growth story.
MSN shares are expected to attract foreign capital if Vietnam's stock market status is upgraded from “frontier” to “emerging”, it said. However, high leverage is still an issue that needs to be closely monitored, and reducing leverage is an important factor for the group to achieve profit growth in the medium term, SSI Research noted.
Other consumer goods stocks such as VNM, KDC, SAB and QNS all showed less positive developments than Vietnam’s benchmark VN-Index in the first six months of the year.
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