UNIVERSITY OF THE WEST OF ENGLAND BANKING ACADEMY OF VIET NAM MASTER SCIENCE IN FINANCE DISSERTATION COMPANY ANALYSIS AND VALUATION OF THE VINAMILK, TH TRUE MILK, BAVI MILK AND NUTIFOO
Background of the study
The reason for choosing the topic
Company analysis and valuation involves evaluating a company's financial health, offerings, and competitive strategies to address external threats and opportunities This process occurs after assessing the impact of macroeconomic factors, demographics, government policies, technology, and societal influences on the industry's competitive landscape.
The company analysis and valuation report offers a comprehensive overview of the company, detailing its industry characteristics and assessing the demand for its products and services It includes a thorough analysis of the supply side, encompassing cost evaluations and factors influencing the selling prices Additionally, the report presents and interprets key financial ratios, facilitating comparisons over time and against competitors A crucial aspect of this analysis is the forecasting of financial statements, particularly when employing the discounted cash flow method for company valuation.
Company valuation plays a crucial role in various business activities, including the purchase, sale, merger, and joint ventures, as well as business liquidation It is essential for investment decisions, capital contributions, and the buying and selling of enterprise securities Additionally, valuation is important for equitization and listing securities on the stock market, facilitating borrowing for business investments, and aiding in collections and dispute resolutions.
Regarding the research scope of this study, this master dissertation analyzes and evaluates some typical companies in the dairy industry in Vietnam, including: Vinamilk,
Th True Milk, Bavi Milk and Nutifood
Despite the growing number of studies on the analysis and valuation of dairy companies like Vinamilk, Th True Milk, Bavi Milk, and Nutifood, much of the research remains at a basic level and lacks depth Consequently, there is a scarcity of reputable valuation reports specifically focused on these companies, with most existing reports being produced by securities firms in Vietnam Internationally, the available reports tend to be general and do not thoroughly explore the specific research content related to these companies.
Accordingly, the analysis and valuation of Vinamilk, Th True Milk, Bavi Milk and Nutifood is very necessary and important in the current period
The dissertation “ Company analysis and valuation of the Vinamilk, Th True
This dissertation focuses on the analysis and valuation of key players in the dairy industry, specifically Vinamilk, Th True Milk, Bavi Milk, and Nutifood It aims to evaluate the performance of these companies and provide future recommendations The findings will serve as a valuable reference for various purposes related to company valuation.
This dissertation aims to explore general theories related to the analysis and valuation of companies, specifically focusing on the operational status of Vietnam Dairy Products Joint Stock Company (Vinamilk), TH True Milk, Nutifood Nutrition Food Joint Stock Company, and Ba Vi Milk Joint Stock Company By analyzing financial statement data, the study evaluates the performance levels of these firms and offers recommendations for their future improvement, along with investment advice for potential investors.
This dissertation has three specific research objectives:
Firstly, the dissertation synthesizes and systematizes the theoretical basis issues related to analysis and valuation of companies
Secondly, the dissertation analyzes and evaluates the current status of operations of companies: Vietnam Dairy Products Joint Stock Company (Vinamilk) , TH True Milk company, Nutifood nutrition food joint stock company and Ba Vi Milk Joint Stock Company based on data from financial statements
Third, the dissertation evaluates the performance level of the companies and make some recommendations for those companies in the future, and provides investment recommendations for investors regarding these firms
This dissertation has six main research missions:
- Providing insights on the current dairy industry
- Analysis of key macroeconomic factors of the world economies and Vietnamese economies
- Analysis of the dairy industry of the world and Vietnam
This article presents an analysis of the financial ratios of four selected companies: Vinamilk, TH True Milk, Nutifood, and Ba Vi Milk The focus is on evaluating their financial statements through three key categories of ratios: profitability ratios, gearing ratios, and investment ratios.
- Calculating an intrinsic value for each of the four firms with the help of valuation models: Vinamilk, TH True Milk, Nutifood and Ba Vi Milk
- Making final investment recommendations following the analyses an devaluation of intrinsic value
This dissertation examines the theoretical foundations of business performance in the dairy industry, focusing on the operational status of key companies such as Vietnam Dairy Products Joint Stock Company (Vinamilk), TH True Milk, Nutifood Nutrition Food Joint Stock Company, and Ba Vi Milk Joint Stock Company, utilizing data derived from their financial statements.
In terms of space, the dissertation researches within 04 companies: Vietnam Dairy
Products Joint Stock Company (Vinamilk) , TH True Milk company, Nutifood nutrition food joint stock company and Ba Vi Milk Joint Stock Company
This dissertation utilizes financial data collected from 2019 to 2021 to analyze the macroeconomic situation and the dairy industry over the past five years (2016 - 2021), while conducting business valuation based on data from the last three years (2019 - 2021).
This dissertation employs a diverse range of research methods frequently utilized in theses, projects, and scientific reports Key methodologies include analysis and synthesis, absolute and relative comparisons, as well as expert consultations with instructors and teachers, alongside reputable references on relevant topics.
The study employs a top-down analysis method to evaluate a firm's prospects, focusing on macroeconomic and industrial factors that significantly influence profit potential It begins by examining the national economic environment of the dairy market, followed by an analysis of the dairy industry Subsequently, the performance of key companies, including Vinamilk, TH True Milk, Nutifood, and Ba Vi Milk, is assessed, leading to price recommendations based on the valuation models used.
This study utilizes PEST analysis to conduct a macroeconomic analysis, emphasizing the examination of key macroeconomic indicators such as the Consumer Price Index (CPI), real GDP, nominal GDP, inflation, and exchange rates.
This analysis provides a comprehensive overview of the global dairy industry, with a specific focus on the competitive landscape in the Vietnamese market It examines key factors influencing competition and highlights current market trends that are driving growth for companies in this sector Notably, Vinamilk, TH True Milk, Nutifood, and Ba Vi Milk are identified as four prominent players in the Vietnamese dairy industry.
This article presents a comprehensive analysis and valuation of four companies—Vinamilk, TH True Milk, Nutifood, and Ba Vi Milk—by examining their financial statements and utilizing key financial databases and various financial websites The study summarizes essential financial ratios to assess the financial health and profitability prospects of these companies Additionally, it investigates their intrinsic values through specially designed valuation models.
This dissertation uses a discounted cash flow valuation model, specifically FCFF and FCFE cash flow analysis instead of dividend flow analysis
Research Motivation
The dairy market in Vietnam is experiencing significant growth, with the population increasing by approximately 1.2% annually Coupled with a GDP growth rate of 6-8% per year and a 14.2% rise in per capita income, the demand for dairy products is consistently high This trend is further supported by the Vietnamese population's focus on improving health and stature In 2010, the average milk consumption per person was around 15 liters per year, and it is projected to nearly double by 2020.
28 liters of milk/year/person
Vietnam's diverse geographical features and tropical climate, complemented by temperate zones, create ideal conditions for dairy cow farming Regions like Ha Tay, Moc Chau, and Binh Duong offer rich grasslands that supply ample nutrition and optimal growth environments for these animals.
Investing in the dairy industry fosters business growth by reducing labor costs while simultaneously providing job opportunities for those in need, thus aiding in hunger eradication and poverty alleviation This approach enhances social welfare and aligns business interests with community development To remain competitive, domestic dairy companies must focus on innovation and sustainability to secure their market position.
Vietnamese market, the future of development policies of enterprises through data and real economic models, solutions for These issues are the aim of the dissertation
This study focuses on the Vietnamese dairy industry, aiming to analyze financial statements and assess key enterprises within the sector The insights gained will be valuable for investors, banks, and government entities.
Research Structure
The research consists of three main chapters:
General view of the world economy with a macroperspective
1.1.1 World economic outlook for 2022 – 2025 1.1.1.1 Overview
As of June 2022, the global economy in 2022 is forecast to decrease compared to previous forecasts
The World Bank reported a significant decline in global economic activity, projecting a growth rate of only 2.9% for 2022 This marks a decrease of 1.2 percentage points from earlier forecasts made in January 2022, largely due to the prolonged impacts of the pandemic and the ongoing conflict between Russia and Ukraine.
The International Monetary Fund (IMF) projects a global growth rate of 3.6% for 2022, which is 0.8 percentage points lower than its January forecast Similarly, the Organization for Economic Co-operation and Development (OECD) anticipates a slowdown in global GDP growth to 3%, marking a decline of 1.5 percentage points from its December 2021 prediction.
The IMF projects a global economic growth of 3.2% for 2022, followed by a decline to 2.9% in 2023 This revised outlook indicates that previously identified downside risks, such as increasing global inflation, a slowdown in China's economy, and the ongoing war in Ukraine, are now becoming evident.
1.1.1.2 Outlook for economic development in Southeast Asia in the 2022 – 2025 period
The Asian Development Bank (ADB) projects Indonesia's GDP growth at 3.7% for 2021, with a positive outlook for 2022 following the easing of Covid-19 travel restrictions in August 2021 The Manufacturing Purchasing Managers' Index has consistently indicated expansion since September 2021 However, significant risks remain due to the economic effects of the Russia-Ukraine conflict and the potential resurgence of Covid-19 ADB anticipates a growth rate of 5% for Indonesia in 2022, while the World Bank estimates it at 5.1%.
Malaysia's economy showed signs of recovery in the fourth quarter of 2021, with growth reaching 3.1% for the year, driven by the easing of Covid-19 restrictions Factors such as improved business and consumer confidence, increased external demand from advanced economies, and strong commodity prices have positively influenced the short-term economic outlook The Asian Development Bank (ADB) projects a growth rate of 6.0% for Malaysia in 2022, while the World Bank estimates a GDP growth of 5.5% for the same year, despite potential lingering effects from the pandemic.
The Philippines is projected to achieve a GDP growth of 5.6% in 2021, bolstered by the easing of Covid-19 restrictions and advancements in vaccinations that have restored consumer and business confidence For 2022, the GDP growth forecast is set at 6.0%, driven by economic recovery, increased investment, and rising domestic consumption Additionally, the World Bank estimates the GDP growth for the Philippines in 2022 to be around 5.7%, according to the Asian Development Bank (ADB, 2022).
Singapore's economy grew 7.6% in 2021, a strong rebound after a slowdown in
In 2022, the Asian Development Bank (ADB) projects Singapore's economy will grow by 4.3%, driven by robust domestic demand and ongoing recovery in both local and international markets.
In the second quarter of 2022, Indonesia, Malaysia, the Philippines, Thailand, and Singapore experienced growth rates of 3.6%, 5.9%, 7.0%, 5.0%, and 2.5% respectively, compared to the same period in the previous year When comparing the second quarter of 2022 to the first quarter, these countries saw growth rates of 0.34%, 1.0%, 2.1%, 1.0%, and 1.0% (Trading Economics, 2022)
The IMF's April 2022 World Economic Outlook report predicts Vietnam's growth will reach 6% in 2022 During the "Vietnam Economic Forecasts 2022-2023" forum on May 12, 2022, an IMF representative highlighted that Vietnam's high vaccination rate has enabled a strategy to coexist with Covid-19 The easing of restrictions has improved mobility, contributing to ongoing economic recovery, which is further supported by relaxed macroeconomic policies Notably, the timely implementation of the Economic Development and Recovery Program is crucial for promoting this recovery.
- Forecast of the World Bank
According to the World Bank's Global Economic Outlook report from June 2022, Vietnam is projected to achieve a growth rate of 5.8% in 2022, surpassing the expected growth rates of the Philippines, Malaysia, Indonesia, and Thailand.
In the June 2022 Vietnam Macroeconomic Update, the World Bank highlighted that Vietnam's economy continues to show robust recovery despite global uncertainties stemming from the ongoing Russia-Ukraine conflict, elevated commodity prices, and supply chain disruptions caused by Covid-19 containment measures.
Industrial production maintained robust growth, achieving a rate of 10.4% compared to the same period in 2021 The manufacturing and processing PMI index rose from 51.7 in April to 54 in May, marking the highest level in the past year and signaling stronger industry growth Retail sales of consumer goods and services saw a month-on-month increase of 4.2% and a year-on-year rise of 22.6% in 2021, reflecting a significant recovery in domestic consumer demand Additionally, Vietnam welcomed approximately 173,000 international arrivals in May 2022, a 70% increase from April.
In May 2022, export growth declined to 18% year-on-year, down from 25.2% in April, while import growth remained steady at 14.6%, a decrease from 16.5% the previous month This marks the highest export figure since April 2020, although it is still 16% lower than pre-pandemic levels.
1.1.2.2 PEST Analysis of the Vietnamese economy
The Socialist Republic of Vietnam, situated on the Indochina Peninsula in Southeast Asia, shares borders with the South China Sea, Malaysia, Indonesia, the Philippines, the Gulf of Thailand, Cambodia, Laos, and China Hanoi serves as the capital of this vibrant nation, which boasts a population of approximately 97.8 million, making it the 16th most populous country globally Covering an area of 128,070 square miles, Vietnam ranks as the 66th largest country in the world by size.
Vietnam's history spans back to the early Paleolithic era, with significant developments including its establishment as part of the Han Dynasty in the 2nd century BC By the 10th century, independent monarchies emerged, leading to the rise of imperial dynasties The 19th century saw French colonization, which lasted until Vietnam gained independence in 1945 The Indochina War culminated in 1954, resulting in the division of Vietnam into a communist North and an anti-communist South This conflict concluded in 1975 with the victory of the Northern Communist Party, leading to the reunification of the country.
Figure 1.1 PEST Analysis of the Vietnamese economy
PEST Analysis of the Vietnamese economy
Technological factors impacting Vietnam Tech Growth
1.1.2.3 Key macroeconomic factors analysis of the Vietnamese economy a Political factors impacting Vietnam
Company Analysis and Valuation of Vinamilk
2.1.1 Business Description a History of formation & development
Vinamilk, established on August 20, 1976, is a leading brand of the Vietnam Dairy Products Joint Stock Company, offering a wide range of products including fresh milk, powdered milk, condensed milk, yogurt, and nutritional water The company originated from the takeover of three dairy factories from the previous regime and has since received numerous accolades, including the Labor Medal and the title of Labor Hero during the renovation period Vinamilk has developed dairy farms across Vietnam and expanded its brand internationally, reaching markets in New Zealand and over 20 other countries, including the United States As a pioneer in the high-end organic food market in Vietnam, Vinamilk provides fresh dairy products that comply with USDA standards The company was officially listed on the stock exchange on January 19, 2006, under the stock code VNM.
Vinamilk Milk Company has provided more than 250 different types of products, with specific main categories as follows:
- Fresh milk with brands: ADM GOLD, Flex, Super SuSu
- Yogurt with brands: SuSu, Probi ProBeauty
- Infant and adult milk powder: Dielac, Alpha, Pedia Grow Plus, Optimum Gold, Ridielac nutritional powder, Diecerna special treatment for diabetes, SurePrevent, CalciumPro, Mama Gold
- Condensed milk: Phuong Nam star, Ong Tho
- Cream and Cheese: Subo Yogurt Ice Cream, Delight Ice Cream, Twin Cows, Ice Cream Kid, Oze Cream Kid, Bow-Weared Cow Cheese
- Soy milk – beverage: Vfresh juice, Icy bottled water, GoldSoy soy milk (Website
Vinamilk, accessed on 14 September 2022) c Business results
In 2021, the fourth wave of Covid-19, coupled with strict lockdowns and extended social distancing measures, significantly impacted consumer goods businesses, including the dairy industry Despite these challenges, Vinamilk (HoSE: VNM), a leading player in the sector, achieved a remarkable milestone by surpassing VND 60,000 billion in revenue for the first time, concluding a tumultuous year on a high note, as highlighted in their annual report for 2021 and early 2022 activities.
In 2021, Vinamilk achieved a significant milestone with total consolidated revenue surpassing VND 60,000 billion for the first time, reaching VND 61,012 billion, which represents a 2.2% increase compared to 2020 This record revenue was driven by growth across all three segments: domestic sales, exports, and foreign branches.
Vietnam Dairy Products Joint Stock Company has reported its business results for the second quarter and the first half of 2022, achieving a net revenue of VND 14,930 billion and a consolidated profit after tax of VND 2,102 billion, according to its annual report for 2021 and early 2022 activities.
- Long-standing brand reputation, many noble awards
Founded in 1976 through the merger of three Vietnamese dairy companies—Dielac, Truong Tho, and Thong Nhat—Vinamilk has evolved over 34 years into a trusted brand under the strategic leadership of director Mai Kieu Lien, offering a diverse range of high-quality products that resonate with domestic consumers.
Vinamilk boasts a visionary leadership team and a commitment to advanced management practices, resulting in a transparent management structure that stands out among Vietnamese companies This strategic approach has led to numerous accolades, including recognition as one of the top 50 most valuable brands in Vietnam by Forbes (2016-2020), a place among the top 10 sustainable development enterprises (2016-2020), and being listed as one of the top 50 enterprises with sustainable development (2016-2020) Additionally, Vinamilk has been recognized as Vietnam's best listed industry from 2013 to 2020 and has consistently ranked among the top 20 high-quality Vietnamese goods from 1995 to 2020.
- The product line is diverse and rich
Vinamilk is dedicated to expanding its range of nutritional products for domestic consumers, beyond just powdered and liquid milk In 2014, the company introduced 29 new products and enhanced 58 existing lines, including various yogurt options (such as blister box, oral form, no sugar, and low sugar), caramel condensed milk, soy milk, energy drinks, fruit juices, fruit-flavored ice creams, and green tea beverages.
- The human factor is always valued and developed
At Vinamilk, the human factor is always valued and developed The regimes and policies of human resource management and remuneration are always paid special attention
Vinamilk's remarkable achievements can be largely attributed to the exceptional leadership of Director Mai Kieu Lien Recognized as one of the most successful and innovative entrepreneurs in the country, she has been featured in Forbes Asia's list of the 50 most powerful women in Asia for four consecutive years from 2012 to 2015 Since the company's inception, she has played a pivotal role as a visionary leader, driving Vinamilk's prosperous development.
Kieu Lien, Vinamilk has developed into one of the most prestigious brands with the highest revenue in Vietnam and throughout Asia
- Distribution network all over the country
Vinamilk boasts an extensive distribution network across Vietnam, with 268 product distributors serving 215,000 retail points, including 650 supermarkets and 74 showrooms as of 2014 To enhance connectivity between its sales staff and distributors, Vinamilk has partnered with Viettel to implement the DMS.ONE distribution management system.
Vinamilk's expanding distribution system is a key factor in its success, enabling the company to effectively deliver its core products to consumers nationwide This strategic growth in distribution is crucial for any consumer goods enterprise aiming to thrive in the market.
- Advanced technology is always of special interest to Vinamilk
Vinamilk utilizes advanced European production technology and imports sterilization equipment from Sweden, ensuring compliance with international standards such as ISO 50001:2011 and HACCP In 2014, the company upgraded 27 transfer stations to meet global standards, increasing the total to 45 stations This modern production system enables Vinamilk to deliver high-quality international products, facilitating business expansion and meeting short-term sales growth expectations.
Modern domestic factories play a crucial role in helping Vinamilk lower transportation costs Each year, the company enhances and expands its machinery and equipment, ensuring that its products consistently meet international export standards.
- Transparent management, high turnover rate
From 2014 to 2017, Vinamilk experienced consistent double-digit revenue growth, increasing from VND 6 trillion in 2014 to VND 10 trillion in 2017 The company maintained a strong financial position, with no debt from 2010 to 2014, a profit margin consistently above 30%, and positive cash flow Additionally, Vinamilk fosters investor relations by organizing annual factory visits for stakeholders.
2014 this number was 18 visits for 250 investors and shareholders b Weakness
- Strong and continuous growth for many years puts strong pressure on the Company and its human resource management team
- Many new products have been researched but have not yet entered the testing phase to launch into the market
Firstly, low dairy productivity and high raw milk prices in the world affect the
The import of raw materials from abroad significantly impacts Vinamilk's revenue, making it vulnerable to both domestic and international economic conditions In the worst-case scenario, a global economic crisis could lead to rising raw material prices, compounded by high inflation rates in Vietnam, ultimately resulting in decreased profit margins for the company.
Fluctuations in foreign exchange rates significantly impact Vinamilk's revenue, as 50% of its raw materials are imported and 30% of its revenue is derived from exports Any changes in exchange rates can directly influence the company's business operations.
Company Analysis and Valuation of TH True Milk
TH True MILK full name is TH Milk Food Joint Stock Company, is a company of
TH group established in 2009 in Nghe An This is a 100% Vietnamese dairy brand specializing in the production and supply of milk and dairy products
Despite being in the market for over a decade, it lags behind the established histories of Vinamilk, Moc Chau, and FrieslandCampina However, this delay is merely a matter of time rather than a setback in its growth trajectory or market presence.
TH True Milk has proven its superiority in the Vietnamese dairy segment
As of 2021, TH True Milk holds a significant 30% market share in the urban retail fresh milk segment Furthermore, TH Dairy Joint Stock Company has solidified its reputation in the dairy industry by ranking 2nd among the Top 10 prestigious food companies in 2020 within the dairy and dairy products sector.
TH True MILK offers a diverse range of products, including TH True Milk, TH True Yogurt, TH True Ice Cream, TH True Juice, purified water, cheese, and butter Among these, the most popular product lines are TH True Milk and TH True Yogurt.
TH True Milk offers a variety of high-quality dairy and beverage products, including TH True Yogurt, TH True Ice Cream, TH True BUTTER, and TH True CHEESE, featuring items like Natural Latte butter and Mozzarella cheese sticks Additionally, the brand provides TH True Juice and purified water, as well as TH True NUT nut milk.
At the end of 2020, TH achieved a world record for having "The world's largest cluster of concentrated farms applying high technology with a closed production process," certified by the World Records Union (WorldKings) In 2020 and early 2021, TH imported 4,500 purebred high-producing dairy cows from the US, adhering to the quarantine and veterinary standards set by the Ministry of Agriculture and Rural Development These cows are expected to significantly enhance milk production, catering to the domestic market of 100 million people while also positioning TH for future opportunities in the international market.
(Annual report for 2021 and report of early 2022 activities of TH True Milk)
Digital transformation is a key focus at TH, serving as a crucial solution to challenges faced during the pandemic Following the successful upgrade of the SAP system in the first half of 2021, TH now boasts one of the world's most advanced platforms for administration, operations, and production.
In the first nine months of 2021, TH true MILK captured approximately 45% of the liquid milk market share in Vietnam, achieving total brand awareness among consumers of 100% By the end of 2021, the company is projected to maintain this 45% market share With a significant investment of $1.2 billion in a dairy farming and milk processing project in Nghe An, TH true MILK has established a comprehensive process from pasture to glass, featuring the largest high-tech dairy farm in Europe.
2015 (Annual report for 2021 and report of early 2022 activities of TH True Milk)
- TH True MILK has been invested methodically from the very beginning
+ High brand awareness and coverage
+ The largest and most advanced factory and farm in Southeast Asia
+The production process is coordinated smoothly from mass farming to wide distribution
+ Funds are provided stably from Bac A Commercial Joint Stock Bank
The dairy market in Vietnam is highly competitive, featuring numerous domestic and imported brands like Vinamilk, NutiFood, and Nestle Despite this fierce competition, TH True MILK has successfully established itself, capturing around 45% of the market share in the Vietnamese dairy industry and expanding its exports to China and ASEAN countries.
TH True MILK specializes in fresh milk production and ranks among the top three milk manufacturers in Vietnam With over 140,000 retail outlets and traditional sales channels, the company leverages its strong position in the SWOT matrix, establishing itself as a leader in the Clean Milk market in Vietnam.
- Social work and connection with the community are always concerned
In the SWOT analysis of TH True MILK, the company prioritizes aligning its interests with the broader goals of the nation, focusing on rationalizing benefits rather than merely maximizing profits.
TH True MILK actively engages in community volunteer projects aimed at alleviating poverty and supporting local development Their initiatives include providing calves to families in need, awarding scholarships to students, and establishing farms and factories to generate employment opportunities for local residents Additionally, TH True MILK donates milk annually to areas with high poverty rates, with a particular focus on assisting underprivileged children.
TH True MILK actively supports community initiatives, including sponsoring millions of glasses of milk for voluntary blood donors on Red Sunday and programs aimed at enhancing women's values and social ethical standards.
TH True MILK's project changes the face of the countryside,
TH True MILK has proposed to the Government the standardization of various milk lines to promote a healthy and beneficial development of the dairy market for consumers.
05 core values of TH True-Milk Group's products bring consumers closer to the business: For public health, All-natural, Fresh - Delicious - Nutritious, Environmentally friendly, Unique excellence, Harmony of interests
- Organizational culture is extremely friendly to the environment and society
TH True-Milk's slogan is "True Happiness", with the desire to bring the best product quality to its target customers b Weakness
- Dairy market with many competitors
The dairy industry in Vietnam is experiencing significant growth, offering consumers a wide range of milk brands at various price points With numerous products available in stores and supermarkets, it can be challenging for consumers to differentiate between the types of milk As one of many domestic dairy brands, TH True MILK must continuously seek innovative strategies to engage and attract customers.
TH True MILK's product pricing is significantly higher than that of competing dairy brands, which poses a challenge in the domestic market against major players like Vinamilk and Moc Chau This elevated price point also limits its accessibility to low- and middle-income consumers in Vietnam.
- High operating costs in dairy farming
In order to produce the best batch of dairy products, TH True Milk has spent a
Company Analysis and Valuation of Bavi Milk
2.3.1 Business Description a History of formation & development
Ba Vi Dairy Joint Stock Company, founded in 2009, is headquartered in Hoa Trung village, Van Hoa commune, Ba Vi district, Hanoi It ranks among the top 10 largest dairy companies in Vietnam The region of Ba Vi is renowned for its rich dairy farming heritage, often celebrated in poetry and songs, and is closely linked to the image of the resilient Ho Dao laborer.
Ba Vi Dairy Joint Stock Company, established in 2009 and located in Hoa Trung village, Ba Vi district, Hanoi, ranks among the top 10 dairy companies in Vietnam Renowned for its rich dairy farming heritage, Ba Vi is deeply rooted in local culture and history Over the past decade, the company has successfully introduced a variety of popular products, including pasteurized fresh milk, yogurt, and milk cakes, under the well-recognized brand "Ba Vi milk."
People's Committee of Ba Vi district to go along with the strong formation and development of the company (Website Bavi Milk, accessed on 09 September 2022) b Products and Services
Currently, Ba Vi Dairy Joint Stock Company is producing about 20 different types of products, belonging to 8 main product lines, including: Pasteurized Ba Vi fresh milk, Ba
Vi offers a variety of pasteurized fresh milk and yogurt products, including flavored blister packs, cow and goat yogurt in cups, sticky rice yogurt, flavored bottled yogurt, caramel, and assorted milk cakes All products are produced and managed to adhere to the highest food safety and hygiene standards, with operations compliant with ISO 9001-2005.
Ba Vi Dairy Joint Stock Company has established a strong presence with nearly 300 agents across 26 provinces in North and South Central Vietnam, in partnership with 26 BigC supermarket headquarters The company is dedicated to expanding its market and production activities while diversifying its product lines to provide essential micronutrients from milk for consumers' daily meals With a commitment to creating true value in each product, Ba Vi Dairy is proud to offer nutritious and healthy options that have gained nationwide trust Over the past nine years, the company's average sales have doubled annually, and for five consecutive years, its products have consistently represented the Ba Vi Dairy brand.
Ba Vi Dairy Joint Stock Company has been recognized for its excellence, receiving the title of High Quality Vietnamese Goods In 2009, the company was honored with the gold cup for famous brands by the Vietnam Union of Science and Technology Associations in the Northern Delta coastal area Additionally, in 2012, it was awarded a Certificate of Merit by the Ministry of Agriculture and Rural Development.
In 2013, the Vietnam Farmers' Association recognized the Company's pasteurized fresh milk as one of the top 10 popular beverage brands Ba Vi yogurt products received certification as typical rural industrial products in the North in 2014 and at the national level in 2015 Additionally, in 2015, Ba Vi Dairy Joint Stock Company was honored with a prestigious brand name based on international assessments from Germany and France These achievements provide a solid foundation for the company to further expand its production efforts.
(Annual report for 2021 and report of early 2022 activities of Bavi Milk)
Ba Vi Dairy Joint Stock Company plays a vital role in advancing high-tech agriculture and enhancing the processing industry, which leads to the production of valuable dairy products This initiative not only fosters local pride in the Tan Ba Vi mountain region but also underscores the company's commitment to sustainable development in the dairy sector.
- Ba Vi Dairy Joint Stock Company has a diversified and rich product portfolio, from fresh milk, yogurt, sticky rice yogurt and Ba Vi specialties, thereby giving customers many choices
Ba Vi Dairy Joint Stock Company utilizes advanced technology in its production processes, ensuring that all products meet stringent Food Hygiene and Safety standards These products are officially certified, proudly bearing the renowned Ba Vi name.
- Ba Vi Dairy Joint Stock Company has been continuously recognized as a VNCLC product for many years and is ranked as a key product of Hanoi city b Weakness
- There are too many brands of Ba Vi milk on the market, causing confusion and affecting consumer confidence
- The product portfolio follows the traditional trend, not focusing on creating the list of newer products c Opportunities
In recent years, Vietnam has experienced a significant rise in milk demand, with statistics from the Vietnam Animal Feed Association indicating an increase of approximately 61% This surge has seen the consumption of raw milk grow from 500 million liters in 2010 to 805 million liters.
2015) Experts assess that the development potential of the dairy market in Vietnam is still very large
Vietnam's dairy market holds significant potential due to its dense population and a high annual growth rate of approximately 1.2% With a GDP growth rate of 6-8% and a per capita income increase of 14.2% per year, the demand for dairy products continues to rise, driven by a trend towards improved health and nutrition among the Vietnamese population In 2010, the average milk consumption per person was around 15 liters per year, and it is projected to nearly double to 28 liters by 2020.
The geographical features and tropical climate interspersed with the temperate belt in Vietnam are very favorable for the development of dairy cows The grasslands such as
Ha Tay, Moc Chau, Binh Duong provide abundant and abundant food sources and good growing conditions
Investing in the dairy industry fosters production growth with reduced labor costs while offering livelihoods to underemployed individuals with low incomes This initiative plays a crucial role in poverty alleviation, enhances social security, and aligns business interests with community welfare.
Accordingly, this is also a great opportunity for BaViMilk to develop more in the future, when approaching the development opportunities of the market d Threats
- Fierce competition between Ba Vi dairy products
Several companies are involved in trading Ba Vi branded products, with three major players dominating the market: International Dairy Products Joint Stock Company (IDP), Ba Vi Dairy Joint Stock Company, and Ba Vi Fresh Milk Joint Stock Company.
The Ba Vi dairy products market is highly competitive, with numerous businesses sharing the same brand name This intense rivalry creates challenges for consumers, making it difficult for them to select the right product amidst the overwhelming number of companies utilizing the Ba Vi name.
- The domestic and international dairy market is fiercely competitive
Vietnam's fresh milk market exceeds 20 trillion VND and continues to grow, with per capita milk consumption at only 5.5 liters, significantly lower than regional counterparts Since 2007, yogurt sales have surged, experiencing a ninefold revenue increase and attracting new entrants While the potential for profit in this market is clear, companies face intense competition both domestically and internationally, raising critical questions about sustainable development.
Bavi Milk is classified as an OTC stock, which typically offers high profit potential but comes with significant risks Accessing the company's annual reports and financial statements can be challenging, complicating accurate financial calculations and forecasts Consequently, the valuation of Bavi Milk relies on analytical methods and evaluations derived from prior studies focused on its valuation.