Vinamilk in the Top 5 intriguing stocks of Southeast Asia

n the report on June 29, HSBC Global Research (HSBC Global Research) selected Vinamilk's VNM stock in the list of the five most intriguing stocks in Southeast Asia. This assessment is based on the expectation that VNM will benefit when commodity prices enter a stable phase.VNM is also the only stock in Vietnam's F&B industry to be recommended by HSBC in this report. The remaining four companies come from the financial - banking, technology - retail segments of Indonesia, Singapore, and Thailand.

Input material prices of manufacturing businesses in general and Vinamilk have been affected by the Covid-19 pandemic and world economic - political issues. Consequently, raw materials price entering the adjustment period will be a positive signal. It will also improvie the profit margin of businesses in the third quarter of 2022.

In the first few months of 2022, VNM stock is not an option for many investors due to the cash flow being engrossed in short-term "games". However, VNM is currently one of the strongest blue chips, bringing in a profit of nearly 12% in the last 12 sessions.

At the end of the last trading session of June (June 30), VN-Index once again broke through the 1,200 mark after many stressful trading sessions. Low volatility stocks like VNM became the "savior" of the market.

Since the last time VN-Index reached 1,500 points on April 7, Vinamilk's stock price has only decreased by 8%. Simultaneously, VN-Index has dropped more than 20% (as of June 30) and many top stocks have also lost up to 20-30% of their value. The trading volume of VNM shares also increased, becoming a "haven" for many investors while the market was under a lot of pressure.

Statistically, since the middle of June, VNM has always appeared on the list of key stocks in the market. Some experts believe that cash flow is being attracted due to Vinamilk paying a cash dividend at a relatively high rate of 38.5% on August 19.

Vinamilk has always been known as a "cash giant" on the stock market. On March 31, The net cash balance on the consolidated financial statements was VND10,500 billion, accounting for 19.8% of total assets. Cash flow tends to shift to stocks that are stable, sustainable, and have great financial potential in the current volatile period of the stock market.

At the end of 2021, Vinamilk and its member companies announced that they are implementing large projects and attracting investors thanks to their growth potential in the future. Specifically, Vinamilk and its member company Vilico are investing VND4,600 billion in Hung Yen dairy factory. This unit is also working with Sojitz, a Japanese partner, to implement a beef project with a scale of up to 30,000 cows, with an investment of VND 2,985 billion. The project is expected to be on the market in 2023.

At the end of May, Vinamilk and Moc Chau Milk kicked off the "Moc Chau Milk Paradise Complex" with an investment of VND 3,150 billion on an area of 170 ha. 

Phase 1 of the Lao-Jagro farm project is being constructed on a total area of 5,000ha. It is expected that at the beginning of the third quarter of 2022, purebred dairy cows imported directly from the US will be brought to the farm. 

With long-term development potential and advantages in finance and strategic management, it can be said that VNM stock is always favored by many securities companies and investment funds.