VNM: Market recovery expected, strong growth projected in 2026 with a target price of 76,800.

About the company

Vinamilk, formally known as Vietnam Dairy Products Joint Stock Company, is the largest dairy producer and a leading food and beverage company in Southeast Asia. Evolving from a state-owned enterprise to a publicly listed nutrition brand, Vinamilk offers a broad portfolio, including liquid and powdered milk, yogurt, condensed milk, plant-based beverages, and specialized nutrition products.

The company benefits from an extensive domestic distribution network spanning over 250,000 retail outlets, reinforcing its leadership in Vietnam’s consumer staples market. Internationally, Vinamilk exports to more than 60 countries across Asia, the Middle East, Africa, and North America, establishing a strong reputation as a major Vietnamese food exporter.

Looking forward, Vinamilk is focused on product innovation, international expansion, and sustainability, aiming to transform into a global nutrition company while maintaining its domestic dominance.

Macroeconomic backdrop supporting Vinamilk's outlook

The government aims to achieve double-digit growth starting from 2026, laying the foundation for a new era of prosperity. However, international organisations such as the IMF and World Bank remain more cautious, projecting actual growth to range between 6.0%–6.5% for the 2025–2026 period.

Stable GDP growth above 6% supports rising disposable income among the middle and emerging middle class. Vinamilk’s core customer segments for value-added dairy products (such as spoonable yogurt, plant-based milk, and organic milk)

On the input side, in contrast to the end of 2025 when prices bottomed out, milk powder prices rebounded strongly in January and early February of 2026. The latest data shows that the average prices of skim milk powder and whole milk powder reached USD 2,973 per ton and USD 3,706 per ton, respectively, representing increases of 22.3% and 17.2% since December 2025.

Regarding the exchange rate, the VND/USD has moderated, with the official average rate remaining relatively stable at around 26,000 by the end of February. However, recent geopolitical tensions in the Middle East, particularly President Trump's military action initiation on Iran, has fueled energy prices and global bonds yields, causing potential inflation pressure and delayed interest rate cuts. As a result, this will eventually put an upward pressure on USD/VND exchange rate.

Looking ahead, Vietnam's inflation is expected to average around 3.5% in 2026, below the government's ceiling of 4.5%, suggesting that price pressures remain manageable. On the demand side, domestic consumption continued to recover steadily in early 2026, as total retail sales of goods increased by 9.3% year-on-year. In addition, inflation appears to be under control, with the food CPI rising 4.26% year-on-year in January, slower than the 4.83% growth recorded in the same period of 2025.

Vinamilk's Financial Health

After a relatively challenging year, Vinamilk ended 2025 with a strong comeback in the final quarter, suggesting that the company may be entering a new phase of recovery.

In Q4 2025, Vinamilk reported revenue of VND 17 trillion, up 10.1% year-on-year, reflecting a noticeable rebound in demand. The recovery was supported by improvements in both the domestic and international markets. At home, revenue grew 7.8% to VND 13.8 trillion, driven largely by product relaunch campaigns and refreshed branding strategies aimed at reconnecting with consumers.

But the real surprise came from overseas markets. International revenue surged 20.9% year-on-year to VND 3.2 trillion, reinforcing the idea that exports are becoming an increasingly important growth engine for the company. In fact, Vinamilk has now exported to around 65 markets worldwide, generating over US$3.7 billion in cumulative export revenue and positioning itself as one of Vietnam’s most successful global food brands.

Behind the scenes, the company also improved its operational efficiency. Selling expenses fell 4.9%, thanks to more efficient marketing spending, which helped boost profitability. As a result, operating profit jumped 32.9% and net profit rose 31.7% in the quarter.

However, the full-year picture was more moderate. In 2025, Vinamilk recorded VND 63.7 trillion in revenue (+3.1%), while net profit remained broadly stable at VND 9.4 trillion. The slower annual growth reflects a challenging environment earlier in the year, but the strong fourth quarter signals momentum heading into 2026.

Catalysts & Risks

Catalysts (Drivers for Upside)

• Vinabeef Beef Project: The full operation of the high‑tech cattle farming and beef processing complex in Tam Đảo (a joint venture with Japan’s Sojitz) is expected to begin contributing meaningful revenue from 2026, opening a new billion‑dollar business segment beyond dairy.
• Gross Margin Recovery: The stable trend in global prices of whole milk powder (WMP) and skim milk powder (SMP) on the Global Dairy Trade (GDT) platform hovering around 3,000–3,200 USD/ton will support gross margins returning to above 42%.
• Market Upgrade Potential: Vietnam’s potential upgrade to Emerging Market status could attract foreign capital inflows into large‑cap, highly liquid, and transparent stocks such as VNM.

Potential Risks

• Demographic Headwinds: Declining birth rates and an aging population in Vietnam create long‑term challenges for the infant formula segment, which historically carries high margins.
• Intense Competition: Pressure from domestic competitors (TH True Milk, Nutifood, IDP) and imported brands forces VNM to maintain high selling and advertising expenses (over 24% of revenue) to defend market share.
• FX & Interest Rate Volatility: Despite its strong financial position, VNM’s reliance on imported raw materials (milk powder) makes its cost of goods sold sensitive to USD/VND exchange rate movements.

Scenario Analysis

Base Case Scenario

In the base case, Vinamilk is expected to deliver steady and sustainable growth over the forecast period. Revenue is projected to rise from VND 66.2 trillion in 2026 to VND 103.1 trillion in 2036, supported by stable domestic demand, gradual export expansion, and new product segments.

Net profit attributable to shareholders is forecast to increase from VND 9.4 trillion to VND 23.1 trillion, with profit margins improving from 17.9% to 28.3% as operating efficiency improves. EPS correspondingly grows from VND 4,050 to VND 9,956, while ROE remains strong above 27% throughout the period.

Overall, this scenario assumes stable economic conditions and consistent execution of Vinamilk’s growth strategy.

Bull Case Scenario

In the bullish scenario, Vinamilk benefits from stronger demand, successful brand repositioning, and faster export growth. Revenue could grow from VND 67.1 trillion in 2026 to VND 129.7 trillion in 2036.

Profitability improves significantly, with net profit attributable to shareholders rising from VND 11.1 trillion to VND 56.0 trillion. EPS increases sharply from VND 4,772 to VND 24,113, supported by premium products, economies of scale, and higher operational efficiency.

This scenario reflects strong execution of strategic initiatives and stronger-than-expected global demand.

Bear Case Scenario

The bearish scenario assumes slower growth and margin pressure due to domestic market saturation, rising input costs, and stronger competition.

Revenue increases modestly from VND 65.6 trillion in 2026 to VND 88.6 trillion in 2036, while net profit gradually declines from VND 7.9 trillion to VND 6.2 trillion. Profit margins fall from 15.3% to 8.8%, and EPS decreases to VND 2,675 by 2036.

This scenario reflects weaker demand and limited success in expanding new growth drivers.

Investment thesis

Vinamilk (VNM) is Vietnam’s leading dairy corporation, holding the largest domestic market share in the liquid milk segment and the second‑largest share in the formula milk segment. The company currently operates 15 farms across the Indochina region and is the primary purchaser of fresh milk from farmers, with a total herd of nearly 130,000 cows.

Vinamilk also owns an extensive distribution network with more than 200,000 points of sale nationwide, giving the company a strong competitive advantage over industry peers.

In addition, Vinamilk’s recent moves to expand into overseas markets through M&A and joint ventures have shown positive signals.

We believe VNM is a promising investment, backed by its position as the dominant player in Vietnam’s dairy market.