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VNM [O-PF +16.6%] - Setting the stage for a solid FY17 - Update

Company Research

15 Feb 2017

We maintain our O-PF rating despite revising our TP down 3% due to a lower PER-derived TP. Market share gains will continue fuelling solid domestic volume growth of 13% in FY17F. We project 15% export growth partly aided by expansion into new developing markets. We project a 260 bps contraction in FY17 blended GPM due to the rebound in input milk powder prices despite a projected 3% ASP hike in FY17. We expect selling expenses to ease in FY17 (+7% vs FY16), cushioning 11% NPAT growth.
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