Sales Director of SSI: “Investors are looking for stocks that are well prepared for a new growth cycle like Vinamilk”

This sharp increase and decrease took place in the context that the Vnindex had increased sharply from 660 points when Covid-19 took place to the current point range of 1,520 points.

Many investors think that now is the sell-off cycle of the stock market, but there are also many completely opposite opinions, they think that many good fundamental stocks have long been neglected by hot cash flow and now is the time. opportunity for these stocks to come back, giving strength to the stock market.

PV has an interview with Ms. Tran Thi Thuy Duong – Sales Director of the Head Office of SSI Securities Joint Stock Company – who has many years of experience in the securities industry so that investors can have more information to evaluate.

Ladies and gentlemen, the stock market is in a period of shock increases and then falls deeply, many investors do not know whether to buy or sell. How do you see investment opportunities in the future?

– At any time when participating in the stock market we have an opportunity, because the businesses on the stock market are the best representatives of the economy. We are a country with GDP growth in the region, which means that in each stage of the economy, there are still businesses that operate efficiently and bring many opportunities for investors to invest in businesses.

In the past time, the market has had some shocking ups and downs, in my opinion, that is the development of all financial markets in the world. This can happen in all cycles both bullish and bearish. Even in a sideways market cycle, this state of affairs sometimes occurs due to short-term expectations created by investors. I think, investors should look deeply inside the movements of the market, find more supportive advisors to be able to choose better stocks, get orientations to choose good basic businesses to invest in. invest for the long cycle, not just looking at the movement of the index in a narrow time frame.

Many investors are of the opinion that many stocks have doubled or tripled in the past 2 years and now is the time to sell. In your opinion, is this reasonable?

– I completely disagree with this point of view. As I have shared above, currently on HoSE, HNX, UpCOM there are about 1,800 stock codes. While each ticker has its own peculiarities, with some doing well and some in the opposite direction, overall, these 1,800 businesses are the best representatives of the health of the economy. So at any time of the market, we can also find undervalued assets to invest in.

Besides, the economy and business are both cyclical. The fact that a stock has doubled or tripled in the past 2 years is because these businesses have seized the opportunity in this cycle, helping to increase revenue and profit during the past time. And if that opportunity of the business can still be taken advantage of in the next economic cycle, it is still effective to continue to invest and hold. We can find many examples of such businesses on any stock exchange, not just in Vietnam.

Back to the investment story at this point, I am seeing a lot of investment opportunities when the economy is reopened and state policies are supporting the economic recovery. We realize that many businesses have prepared very well for this new cycle, and I think they will develop very well in the coming time. Each investor himself, when reading this article, must have shaped some of the businesses of the nature that I mentioned. Investors should always remember that, at any given time, there are industries and businesses that benefit from the new economic cycle.

Can you cite some stocks with that characteristic?

(Laugh) – As an investment asset management consultant for clients, I have a habit of sharing very carefully about the industry and the businesses that are effective in that industry when recommending investments. I don’t want my clients to receive the wrong investment information leading to undesirable results. So given the length of today’s interview, it will be difficult for me to share all the information about many stocks. I just take an example here of a stock that is well known and discussed by many people in the past time is Vinamilk’s VNM stock.

Recently, personally, I have also received many questions about whether or not to invest in Vinamilk. Perhaps, when asking this question, the people who ask themselves are also seeing that…there is something irrational with the stock price of a good business going down. When asked, I know investors are also trying to find more reasons to buy but not sure if they should find other arguments to support. In fact, many investors are in a state of uncertainty because their mindset is leading them to invest in Vinamilk because VNM is a stock with good fundamentals, sustainable development, good governance but short psychology. Their limitations are leading them to actions that do not match their thinking. They look at the short-term movements of stock prices, the general market performance and the performance of other stocks and make comparisons that lead to somewhat influenced investment decisions.

I see many analytical opinions that Vinamilk is under pressure on raw material prices and high logistics costs. Is the investment risky?

– The story of the price of raw materials, logistics costs we all see how it has impacted the economy, manufacturing enterprises… I emphasize that, the impact on the economy; which has a profound and wide impact on many industries, not only Vinamilk. Vinamilk is just one of the businesses in the economy and has to face this global challenge. The question investors ask the business, I think, is not when this increase in raw material prices will stop, but what the business has/is and will do when this situation occurs.

In my opinion, investors should choose enterprises that have been controlling input costs well like Vinamilk. Vinamilk has managed input costs quite effectively when the gross margin has decreased less than the price growth rate of input milk materials (The price of raw milk increased by 50% while Vinamilk’s gross margin decreased by only about approx. 5-6%).

If I look closely at Vinamilk’s strategies in recent years, I think that Vinamilk has carefully prepared the scenario. For example, when sugar is a key input material in Vinamilk’s production, this company has made a move to buy Vietsugar to proactively respond. Similar to dairy materials, Vinamilk has invested heavily in building material areas to reduce the impact on business performance. According to Vinamilk’s report at the end of 2021, the total supply of fresh milk in 2021 is the highest ever, reaching approximately 380 thousand tons. In addition, with the addition of new farms such as Quang Ngai farm and a complex project in Laos (the scale of phase 1 is 8,000 heads) expected to go into operation in 2022, the ability to self-sufficient in raw milk materials Vinamilk’s input will also be increased. Vinamilk also often signs forward contracts with raw material suppliers to reduce the risk of price fluctuations.

The farm in Quang Ngai is one of three farms in Vinamilk’s Green farm eco-farm system.

Vinamilk’s flexibility in each stage of the economy also shows that the company has been deeply involved in the supply chain from raw materials to product distribution, with good control of costs from input to output. We won’t have to worry much. Even investors must see this as a good investment opportunity when other businesses do not have that advantage.

So now the question is when can effectively invest in VNM. According to our analysis, the dairy industry accounts for 14% of total global agricultural trade. The demand for milk of Vietnamese and Asian people is very low compared to the world average. So about the development potential of the industry, we can agree that this is a potential industry in the short – medium – long term.

After realizing the potential of the industry, investors should look at VNM again. Many people say that VNM is out of doors for high growth when it has approached 50% of the market share of the whole industry, but they have not considered enough 2 factors:

– Firstly, Vinamilk is promoting its presence in Asian countries, especially China with the largest potential population in the world today. Vinamilk’s export segment is also highly expected thanks to continuous double-digit growth over the years, profit margin is even higher than domestic. In 2021, the company has developed 2 new export markets and brought the total accumulated export markets to 57.

Vinamilk’s dairy products are noticed by consumers when participating in the international food fair in Shanghai at the end of 2021

– Secondly, Vinamilk has been planning to expand the product portfolio and many products besides cow’s milk such as fruit juice, nut milk, beef… Especially phase 1 of the project beef project is expected to come into operation in 2023-2024 with a capacity of 30,000 beef cattle/year, estimated revenue of VND 2,000 billion in the first year, so according to my analysis, we will see a strong growth in revenue Vinamilk’s share in the coming time will not only stop at 6x trillion, but can reach higher numbers in the following years.

The current valuation of VNM by different methods has been voiced by many securities companies and analysts, so I won’t say more, but I personally find the current price range of 7-8x to be a really attractive area. guide to invest and hold. If you learn the word “Forbearance”, investors will not only earn cash flow from very high annual dividends, but also hold a growing business with a lot of financial potential and investment information. completely transparent.

Normally, with Vinamilk-style “less game” businesses, which group of investors will prefer?

(Laugh) – My advice to any investor when entering the market, we must have a clear direction with our capital when disbursing. If you determine that capital is used for trading, look for stocks with high volatility, volatility that creates opportunities for you to make money quickly. But if you define that capital as an investment, then choose good assets to hold for a long time, where we have safety and can disburse with small to large capital in the long term. I also have to add, trading can bring short-term joy (or sadness) as soon as you enter the order. But, investing will help you grow your assets in the long run.

Thank you for sharing!

– I hope this sharing session can help investors have a better view of the market and not miss upcoming investment opportunities. With any questions, investors can contact me via email: [email protected]. I am happy to advise and share my investment views to help investors grow their assets in the long term.

PV