August 5, 2017 2:35 am JST

Further Vinamilk divestments likely in October

State ownership of Vietnam's biggest dairy company will be reduced to 36%

HO CHI MINH CITY -- The government's 40% stake in Vietnam Dairy Products, commonly known as Vinamilk, will be cut by an additional 3.3%, possibly in October, a move that State Capital Investment Corp. hopes will bring in 6.5 trillion dong to 7 trillion dong ($285 million to $307 million).  

An SCIC representative said no limit will be placed on buyers this time. The shares that will be offered were left unsold at auction last year after SCIC set out to divest itself of 9% of the total, but restricted individual bidders to 2.7%. Only 5.4% of the shares were taken up by subsidiaries of Singapore-based F&N, which paid 11 trillion dong, or 144,000 dong apiece -- 8% above market value at the time.

The foreign ownership cap was removed last year as the company sought to raise capital for overseas expansion. With a stake of around 36%, SCIC will remain Vinamilk's largest shareholder. Shareholders that own more than 1% of Vinamilk include F&N Dairy Investments (16.04%); F&NBEV Manufacturing (2.7%); and Arisaig Asean Fund (1.37%).

Vinamilk reported a 17.3% expansion in net profit to 5.8 trillion dong and an 11.5% rise in revenue to 25.4 trillion dong in the first half of 2017 -- both on track to meet full-year targets. Earnings per share for the period reached 3,616 dong, a 16% year-on-year increase.

Overseas sales contributed 3.8 trillion dong to total revenue, a fall of 15% from last year that was partly attributed to slower sales in Iraq. Domestic revenue rose 17% to 21.5 trillion dong after intensified marketing activities.  

Vinamilk's key products, including liquid milk and yogurt, have continued to do well with little change in price. Vinamilk's overall market share increased 1.6% year on year in the first half to 56.7%, according to AC Nielsen.

Vinamilk shares have risen 21.5% since the start of the year, hitting 154,000 dong ($6.77) on Friday, ranking them fourth highest on the Ho Chi Minh City Stock Exchange after Sabeco ($10.81), Coteccons Construction ($9.19), and VinaCafe Bien Hoa ($8.8).

Asia300

Vietnam Dairy Products Corp.

Vietnam

Market(Ticker): STC(VNM)
Sector:
Industry:
Consumer Non-Durables
Food: Meat/Fish/Dairy
Market cap(USD): 9,505.23M
Shares: 1,451.30M

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