VNM — 3Q25 AM — Key takeaways

Key takeaways

Business performance continued to improve in 3Q25, supported by both domestic and international markets.

• 3Q25 revenue rose by +1% QoQ / +9% YoY to VND 17.0tn. In which, domestic sales grew by +4% YoY to VND 13.5tn. Meanwhile, international sales surged by +33% YoY to VND 3.5tn, driven by strong growth in key African and Asian markets, particularly Cambodia given favorable market conditions.
• 3Q25 gross margin slid by -0.2ppt QoQ but improved by +0.6ppt YoY to 41.8% given stronger sales amid stable production costs.
• Ongoing digitalization initiatives have enhanced operational efficiency, with the SG&A-to-revenue ratio was down by -1.2ppt QoQ /-0.4ppt YoY to 23.8% in 3Q25.
• VNM conservatively booked a one-off provision for its investment in Miraka Holdings (New Zealand) in 3Q25, due to concerns that weaker demand for milk powder in China could negatively impact Miraka’s performance. As a result, losses from joint ventures widened to VND 195bn, a reversal to an earning of VND 4bn in 2Q25 and a 38x increase from the loss recorded in 3Q24.
• Consequently, 3Q25 PATMI reached VND 2.5tn (+2% QoQ/+5% YoY) while net margin reached 14.9% (+0.1ppt QoQ / –0.6ppt YoY).

In 9M25, VNM’s revenue and net profit fulfilled 72% and 69% of our 2025E forecasts, respectively.

• 9M25 revenue was VND 46.6tn (+0.7% YoY), mainly driven by the +14% YoY growth in international sales, while domestic sales declined by -2.2% YoY.
• Gross profit dipped by -0.3% YoY to VND 19.3tn in 9M25, reflecting high imported milk powder prices during the period. Accordingly, 9M25 gross margin declined by -0.4ppt YoY to 41.4%. Raw material prices have softened since 4Q25 (see charts on the left for details) and VNM expects this trend to positively support margins in 1H26.
• 9M25 PATMI fell by -9.6% YoY to VND 6.6tn, mainly due to the decline of -29% YoY in 1Q25 and -7% YoY in 2Q25.

Our view

We remain cautiously optimistic on VNM. While long-term growth may remain moderate given its dominant market position, we like VNM for its strong dividend yield and ongoing efforts to “renew” itself.

VNM’s share price almost reached our target price in mid-September before consolidation. At current levels, our target price still implies a +19.8% 12-month TSR, and we reiterate our BUY call

Please access the link for more details: VNM – Express note – 3Q25 AM