Market analysts have maintained the NEUTRAL rating on Vietnam’s Food & Beverage (F&B) sector in view of moderate earnings growth of 8% year-on-year (YoY), compared to 17% growth for VN-Index and Earnings per Share (EPS), as well as lack of re-rating catalysts, according to aMaybank Securities Ltd research note published on Dec 17.
F&B sector sales growth is projected to be around 5% and earnings growth 10% in 2024. Sector sales growth is projected to remain at about 5.7% in 2025. The beverages segment (+4.6%) is predicted to grow slower than the food segment (+8.7%) in terms of sales, due to slower-than-expected growth in the dairy sector, and on-going regulatory pressures on the beer sector.
Notably, despite the lack of re-rating catalysts, Vietnam’s market status upgrade to “Emerging” by FTSE in 2025 could benefit a few large-cap companies such as Vietnam Dairy Products Joint Stock Company (Vinamilk) and Saigon Beer – Alcohol – Beverage Corporation (Sabeco). [FTSE: Financial Times Stock Exchange]
In the first nine months of 2024 (YTD 2024, up to September), listed F&B stocks have shown mixed YTD performance. Most stocks experience significant net foreign selling in 2024. The stock picks of Vietnam’s F&B sector remain market leaders, particularly Vinamilk which appears undervalued with stable business model and strong balance sheet. Analysts have also highlighted Sabeco, Vietnam’s leading beer producer which could potentially be included in FTSE EM indices in financial year 2025.
Since the second quarter of 2024, Vietnam’s FMCG (Fast Moving Consumer Goods) consumption has shown signs of recovery, with two consecutive quarters of positive volume growth. Listed companies in the F&B sector performed robustly in the nine-month period, supported by optimised product mix, cost-saving initiatives, and rebranding efforts.
Listed F&B stocks have shown mixed YTD price performance, impacted more by foreign fund movement, rather than fundamentals. In 2024, most stocks experience foreign net-selling. For 2025, analysts have yet to identify strong re-rating catalysts for the sector from a fundamental angle, but only structural catalysts for a few names.
