Vinamilk (HOSE: VNM) | 3Q26 Earnings First Take, BUY – Upside +25.3%

Strong Domestic Growth Support Earnings, Rising Input Costs Remain A Key Risk

3Q26 Performance: VNM reported 3Q26 revenue of VND18,465bn (+8.7% YoY, -2.0% QoQ), driven by domestic sales of VND14,718bn (+8.8% YoY), supported by premiumization, modern trade expansion with a retail network exceeding 1,000 stores. GPM edged down 0.2ppts YoY to 41.4%, reflecting mixed dairy input costs, with whole milk prices down 11.4% YoY but skimmed milk prices up 26%. NPAT-MI increased 17.3% YoY to VND2,964bn, partly supported by a 51.7% increase in financial income to VND600bn. For 9M26, revenue increased 14.5% YoY to VND53,461bn, driven by domestic growth of 11.1% and export growth of 27.9%. GPM expanded 1.3ppts YoY to 42.5%, supported by a 2.1ppt improvement in domestic GPM to 43.1%. SG&A declined to 24.8% of revenue from 25.3%, contributing to NPAT-MI growth of 30.3% YoY to VND8,560bn, outpacing revenue growth.

FY26 Forecast Delivery: 9M26 revenue and NPAT-MI fulfilled 74.6% and 80.9% of SBBS's FY26 forecasts, respectively, and 80.4% and 87.6% of management's targets, indicating earnings remain on track.

FY27 Outlook: We expect slower growth in FY27 due to high base FY26, and export growth normalizes. Skimmed milk prices rose 55.1% YoY to ~US$4,000/ton in Oct-26, increasing the risk of GPM compression as higher-cost inventory flows through COGS. We would maintain prudent FY27 margin and export assumptions pending greater visibility on raw material costs and overseas demand.

Investment Implications: Defensive Yield, but Limited FY27 Earnings Upside

VNM's strong net cash position and established domestic market presence underpin its defensive investment profile. However, rising input costs and normalization of export growth could constrain FY27 earnings momentum, limiting near-term re-rating potential. VNM officially announced its 1st cash dividend advance for 2026 at a payout rate of 25% (VND 2,500 per share). The FY25 cash dividend of VND 4,350/share implies yield of ~7.3% at the current share price.