In the meeting with shareholders in February 2023, Vinamilk's management board was not too optimistic about the recovery of milk consumption demand because consumers are tightening spending.
Regarding input material expenditure, global milk powder prices are expected to decline in 2023, the reopening of China will not have much impact on this trend. Vinamilk has finalised the input milk powder price for the first half of 2023.
According to VNDIRECT Securities Joint Stock Company (VNDIRECT), most labour-intensive industries are facing many challenges, leading to rising unemployment and forcing consumers to tighten their spending. This company estimates that consumption in Vietnam will be strongly affected in the first 6 months of 2023 and gradually recover its growth momentum from the third quarter of 2023.
According to Vinamilk, most Vietnamese consumers do not consider milk as an essential nutritional product. Therefore, demand for dairy products will weaken as consumers tighten their spending habits.
Vinamilk expects milk consumption to grow below 5% over the same period in 2023.
Besides, Vinamilk is facing increasing competitive pressure in most product lines, especially in the powdered milk segment. The restructuring of the sales channel in 2022 may continue to affect sales in the first half of 2023.
Analysts expect Vinamilk to maintain a flat market share in 2023-2024, with domestic consumption increasing while average selling price remains unchanged in 2023 and slightly up in 2024.
In addition, VNDIRECT said that Vinamilk's export revenue will increase year-on-year in 2023, as milk consumption demand in the Middle East and China markets will recover. However, the Chinese market has not yet contributed a large proportion to export revenue, only about 5%. Therefore, this event will not significantly affect Vinamilk's export revenue growth.
However, VNDIRECT still believes that the price of whole milk powder will continue to decrease and the business will record an increase in gross profit margin in 2023.
