Annual Report
Vietnam
Company Update
21 November 2012
Kinh Do Corporation
HOLD (Downgraded)
Growth Fully Priced-In
Share price:
Target price:
VND 40,500
VND 40,800 (revised)
Outstanding 3Q12 results. KDC’s 3Q12 net profit soared 43% YoY to
VND316b driven by a 9.4% increase in revenue and a 5ppts YoY expansion in the company’s gross margin to 50.4% in 3Q12. The outstanding results are due to 13% and 31% increases in mooncake and ice cream sales, respectively, especially as these two segments carry relatively high gross margins.
Tuyen Nguyen tuyen.nguyen@kimeng.com.vn (84) 8 44 555 888 – ext 8081
Stock Information
Description: KDC is one of the best processed food companies in Vietnam with a 30%-market share of Vietnam’s bakery/confectionery market. It is also eyeing the instant noodle and fish sauce businesses.
Ticker:
Shares Issued (m):
Market Cap (USD m):
3-mth Avg Daily Turnover (USD m):
VN Index:
Free float (%):
KDC VN
158.4
305
0.3
385
50
Major Shareholders:
PPK LIMITED COMPANY
KINH DO INVESTMENT
DEUTSCHE BANK AG
EZAKI GLICO
11.0
8.9
6.3
10.5
Key Indicators
ROE – annualised (%)
Net cash (VND b):
NTA/shr (VND):
Interest cover (x):
9.9
818
28,950
3.4
Historical Chart
VN D '000
Vo l ('000)
50
2500
45
40
2000
35
30
1
500
Profit growth resumes in 9M12. The 3Q12 profits more than compensated for the losses incurred in 1H12 (due to the disposal of
KDC’s stake in dairy producer Nutifood). In fact, the company’s 9M12 revenue and net profit rose 6% and 25% YoY to VND3,128b and
VND307b, respectively. Without the non-recurring loss, the company’s
9M12 net profit would have soared 43% YoY to VND368.2b. Gross margins expanded from 40.2% in 9M11 to 44.5% in 9M12.
SG&A concerns abating. In our report dated 23 Aug 2012, we expressed concern about the continuous rise in KDC’s SG&A-torevenue ratio since 2009, though we acknowledged that it was partially due to an 80% increase
Company Update
21 November 2012
Kinh Do Corporation
HOLD (Downgraded)
Growth Fully Priced-In
Share price:
Target price:
VND 40,500
VND 40,800 (revised)
Outstanding 3Q12 results. KDC’s 3Q12 net profit soared 43% YoY to
VND316b driven by a 9.4% increase in revenue and a 5ppts YoY expansion in the company’s gross margin to 50.4% in 3Q12. The outstanding results are due to 13% and 31% increases in mooncake and ice cream sales, respectively, especially as these two segments carry relatively high gross margins.
Tuyen Nguyen tuyen.nguyen@kimeng.com.vn (84) 8 44 555 888 – ext 8081
Stock Information
Description: KDC is one of the best processed food companies in Vietnam with a 30%-market share of Vietnam’s bakery/confectionery market. It is also eyeing the instant noodle and fish sauce businesses.
Ticker:
Shares Issued (m):
Market Cap (USD m):
3-mth Avg Daily Turnover (USD m):
VN Index:
Free float (%):
KDC VN
158.4
305
0.3
385
50
Major Shareholders:
PPK LIMITED COMPANY
KINH DO INVESTMENT
DEUTSCHE BANK AG
EZAKI GLICO
11.0
8.9
6.3
10.5
Key Indicators
ROE – annualised (%)
Net cash (VND b):
NTA/shr (VND):
Interest cover (x):
9.9
818
28,950
3.4
Historical Chart
VN D '000
Vo l ('000)
50
2500
45
40
2000
35
30
1
500
Profit growth resumes in 9M12. The 3Q12 profits more than compensated for the losses incurred in 1H12 (due to the disposal of
KDC’s stake in dairy producer Nutifood). In fact, the company’s 9M12 revenue and net profit rose 6% and 25% YoY to VND3,128b and
VND307b, respectively. Without the non-recurring loss, the company’s
9M12 net profit would have soared 43% YoY to VND368.2b. Gross margins expanded from 40.2% in 9M11 to 44.5% in 9M12.
SG&A concerns abating. In our report dated 23 Aug 2012, we expressed concern about the continuous rise in KDC’s SG&A-torevenue ratio since 2009, though we acknowledged that it was partially due to an 80% increase