FGate Vinamilk VNM Model

Valuation Statistics - Vinamilk Vinamilk - Range of Valuation Multiples / Premiums Vinamilk - Implied Per Share Value Range

25th 75th Applicable

Minimum Pecentile Median Pecentile Maximum Vinamilk Minimum

Methodology Name Multiple Multiple Multiple Multiple Multiple Figure Multiple

Public Company Comparables:

Trailing EV / Revenue: 0.5 x 1.3 x 1.3 x 2.0 x 7.3 x 28,421,157 29-Oct-65

2013E EV / Revenue: 0.5 x 1.1 x 1.1 x 1.7 x 4.3 x 32,854,724 26,663

Trailing EV / EBITDA: 9.0 x 15.0 x 20.9 x 22.0 x 37.2 x 7,109,042 82,462

2013E EV / EBITDA: 8.2 x 11.8 x 15.8 x 17.5 x 22.7 x 7,316,892 78,193

Trailing P/E: 18.2 x 24.6 x 28.9 x 35.9 x 56.6 x 6,362,233 139,000

2013E P/E 15.5 x 20.1 x 25.6 x 31.8 x 46.0 x 6,832,177 118,441

Discounted Cash Flow Analysis:

14.3%-18.3% Discount Rate, 5.0-7.0x Terminal Multiple: 20-May-29

Units: VND million

Valuation Summary

Valuation Date: 13/09/2013 Unit: 1,000,000

Company Name: Vinamilk Currency: VND

Share Price: 139,000 USD /VND 21,500

Basic Shares Outstanding: 833,955,796

Basic Equity Value (VNDm) 115,919,856

Less: Cash & equivalent (4,912,485)

Plus: Debt -

Plus: Minorities Interest -

Enterprise Value 111,007,370

Valuation Multiples Historical Forecast

2011A 2012A 2013E 2014E 2015E 2016E 2017E

EV / Revenue: 5.13 4.18 3.38 2.80 2.31 1.93 1.60

EV / EBIT: 23.46 16.47 13.90 11.24 9.21 7.65 6.35

EV / EBITDA: 25.72 17.89 15.17 12.39 10.06 8.28 6.80

Equity Value / FCF: 85.97 33.57 27.94 14.33 11.99 9.16 7.74

P / E: 27.48 19.92 16.97 13.76 10.99 8.89 7.19

P / BV: 9.29 7.48 6.06 4.79 3.71 2.87 2.21

Vinamilk - Implied Per Share Value Range

25th 75th

Pecentile Median Pecentile Maximum

Multiple Multiple Multiple Multiple

Net Debt (VND mn) (4,912,485)

12-Mar-33 9-Aug-36 15-Jul-02 25-Jan-00 Shares Outstanding (mn) 834

47,648 50,416 71,206 174,951

133,598 183,653 193,585 323,001

109,172 144,656 159,747 204,904

187,755 220,360 273,691 431,441

153,576 195,367 242,361 350,905

16-Nov-55 29-Apr-85 1-Feb-18 20-Jul-54

VNM Statistics

Min.

14.3%-18.3% Discount Rate, 5.0-7.0x Terminal Multiple: 120,306

2013E P/E 118,441

Trailing P/E: 139,000

2013E EV / EBITDA: 78,193

Trailing EV / EBITDA: 82,462

2013E EV / Revenue: 26,663

Trailing EV / Revenue: 24,044

- 50,000 100,000

14.3%-18.3% Discount Rate, 5.0-7.0x Terminal Multiple:

2013E P/E

Trailing P/E:

2013E EV / EBITDA:

Trailing EV / EBITDA:

2013E EV / Revenue:

Trailing EV / Revenue:

Public Comparables Valuation

Discounted Cash Flow Valuation

25th Median 75th Max Min Point

129,983 140,739 152,704 166,022 120,306

153,576 195,367 242,361 350,905 118,441

187,755 220,360 273,691 431,441 139,000

109,172 144,656 159,747 204,904 78,193

133,598 183,653 193,585 323,001 82,462

47,648 50,416 71,206 174,951 26,663

48,651 49,897 73,976 255,697 24,044

100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000

Min to 25th

25th to Median

Median to 75th

75th to Max

Share Price (9/20/13)VND 139,000

25 Point Med Point 75 Point Max Point

9,677 10,756 11,965 13,318

35,135 41,791 46,993 108,544

48,755 32,605 53,331 157,750

30,979 35,484 15,090 45,157

51,136 50,055 9,932 129,416

20,985 2,768 20,790 103,745

24,607 1,246 24,080 181,721

Min to 25th

25th to Median

Median to 75th

75th to Max

(9/20/13)

Vinamilk Income Statement

Units: VND million, except per share data Historical

2005A 2006A 2007A 2008A

Net Revenue 5,638,784 6,619,102 6,537,964 8,208,982

COGS 4,379,796 5,012,632 4,836,283 5,610,969

Gross profit 1,258,988 1,606,470 1,701,681 2,598,013

Selling expenses 654,102 899,396 864,363 1,052,308

G & A expenses 80,438 112,888 204,192 297,804

EBITDA 524,448 594,186 633,126 1,247,901

Deprication & Amortization

Operating Profit

Financial income 55,373 74,253 227,327 190,860

Interest income

Investment income

Other financial income

Financial expense 19,988 40,002 25,862 197,621

Interest expense 10,030 21,192 11,667 26,971

Change in provision for investment

Other financial expense

Net other income 42,767 106,032 120,790 130,173

Earning before tax 602,600 734,469 955,381 1,371,313

Income tax paid - - - 161,874

Deffered tax 2,884 (2,884) 8,017 39,259

Net income 605,484 731,585 963,398 1,248,698

Minority Interest - - (50) (1,422)

Net income attributable to Equity Shareholders 605,484 731,585 963,448 1,250,120

EPS 3,816 3,801 5,607 7,132

Number of share adjusted 159 159 172 175

EPS adjusted 834 1,006 1,225 1,559

Number of share adjusted for bonus issuance 726 728 786 802

EPS Growth 21% 22% 27%

Allocation of D&A

COGS

Selling expense

G&A expense

Other income

Gain/Loss from fixed asset disposals

Income from disposals

Remaining cost of assets

Other income/expense

OPERATING ASSUMPTIONS

Revenue Growth 17.4% -1.2% 25.6%

Gross margin 22.3% 24.3% 26.0% 31.6%

Selling expense (% revenue) 11.6% 13.6% 13.2% 12.8%

Admin expense (% revenue) 1.4% 1.7% 3.1% 3.6%

Operating margin 9.3% 9.0% 9.7% 15.2%

EBITDA Margin

Other financial income (% revenue) 1.0% 1.1% 3.5% 2.3%

Other financial expense (% revenue) 0.4% 0.6% 0.4% 2.4%

Net Other income excl disposal (% revenue) 1% 2% 1.8% 1.6%

Effective tax rate 0% 0% 1% 15%

Net margin % 10.7% 11.1% 14.7% 15.2%

Net margin Growth 21% 32% 30%

Effective cash interest rate

Investment yield

Debt interest rate

DETAILED SALES FORECAST

VND million

Segment 2005A 2006A 2007A 2008A

Condensed milk

Revenue 1,690,000 2,332,000 2,380,605

Growth 38.0% 2.1%

In which: Price growth

In which: Volume growth

% Market share

% Total Revenue 25.5% 35.7% 29.0%

COGS

Gross profit

Gross margin %

Liquid milk

Revenue 1,659,000 1,736,000 2,216,425

Growth 4.6% 27.7%



% Market share

% Total Revenue 25.1% 26.6% 27.0%

COGS

Gross profit

Gross margin %

Powdered milk

Revenue 2,191,000 1,584,000 2,380,605

Growth -27.7% 50.3%



% Market share

% Total Revenue 33.1% 24.2% 29.0%

COGS

Gross profit

Gross margin %

Yoghurt

Revenue 634,000 698,000 985,078

Growth 10.1% 41.1%



% Market share

% Total Revenue 9.6% 10.7% 12.0%

COGS

Gross profit

Gross margin %

Beverages

Revenue 445,102 187,964 246,269

Growth -57.8% 31.0%



% Market share

% Total Revenue 6.7% 2.9% 3.0%

COGS

Gross profit

Gross margin %

Exports

Revenue

Powder revenue

Liquid & condensed revenue

Growth



% Market share

% Total Revenue

COGS

Gross profit

Gross margin %

Total

Revenue 6,619,102 6,537,964 8,208,982

Growth -1.2% 25.6%

% Total Revenue

COGS

Gross profit

Gross margin %

DETAILED WORKING

Market

Average milk consumption per capital (liter) 9

CAGR of consumption per capita

Population growth (%)

Estimated milk consumtion growth

Domestic production volume (ton) 110,000

Liquid milk (000' litres)

Powdered milk (ton)

Total volume consumed (by units)

Condensed milk ('000 cans)

Liquid milk (000' litres)

Powdered milk (ton)

Yoghurt (000' litres)

Drinking yoghurt (000' litres)

VINAMILK DATA

Average Selling price (VNDm/ton)

Average volume sold (ton)

Condensed milk

Liquid milk (litre)

Powdered milk

Yoghurt

Beverages

Export - powder

Export - liquid

Average market share (%) 37%

Condensed milk 79%

Liquid milk 35%

Powdered milk 14%

Yoghurt 60%

Beverages

Export - powder

Production capacity

Designed capacity (ton) 504,000

Condensed milk ('000 cannes) 260,000

Liquid milk ('000 lit) 237,000

Powdered milk (ton) 18,000

Yoghurt ('000 lit) 56,000

Beverages

Selling price growth

Condensed milk

Liquid milk

Powdered milk

Yoghurt

Beverages

Export - powder

Volume growth

Condensed milk

Liquid milk

Powdered milk

Yoghurt

Beverages

Export - powder

PRICE FORECAST

- Price Increase

Period

06-12

CAGR

- GDP per capita

Year

4-Jul-05

12-Jul-05

CAGR

- Price Increase Forecast

Liquild milk

Yoghurt

Condensed milk

Powdered milk

- VNM wants to win market share thanks to its outstanding capacity

- Market Segmentation: Increasing Mid-end customers.

- Price Increase grows in line with GDP per capita of mid-end customers.

CONDENSED MILK

- Current market share: 80%.

- VNM restructures its plants into separate manufacturing divisions: Liquild milk, yoghurt; Condensed milk; Powder Milk

and it aims to win market share of liquid milk & Powdered milk.

- Condensed milk is forecasted to grow thanks to Price Increase, not capacity

Condensed Milk

LIQUID MILK

- National-wide raw fresh milk CAGR 2009-2012: 11.15% (Vietnam Husbandry Department)

- Currently, VNM buys 40% total national raw fresh milk each year.

and imports 60% rest for production.

Total raw fresh milk input is equal to total suppy from domestic farmers.

(Tons)

Total Domestic Supply

Total VNM Demand

Growth

Domestic supply for VNM

% Share

Import

% Share

- VNM will maintain the proportion of raw fresh milk 40:60 between domestic supply & import.

- Total Raw fresh milk demand for production will grow at 12% CAGR (2013-2017)

(slightly higher than the period 09-12), in line with liquild milk consumpsion per capita

for the period 2012-2015

Year

4-Jul-05

7-Jul-05

12-Jul-05

CAGR '12-15

CAGR '12-20

Liquild Milk

POWDERED MILK

- Current VNM's powdered milk capacity:

, equal to total domestic demand.

- VNM wants to win additional 5-10% market share , however, due to the high demand for foreign powdered milk brands

, and it takes time to change the consumer's taste, we only forecast VNM will gain 1.5% current market share per year.

- 2012 capacity: 13,500 tons. This year, from Q2, VNM has launched its new powdered milk plant with capacity 54,000 tons,

(4x last year capacity).

(tons)

VNM's Domestic volume

Growth

Domestic Powdered Milk's

Revenue Growth

- If VNM fully utilizes 100% of its capacity in 2017

Export

VNM's Export volume

Growth

Export Powdered Milk's Revenue Growth

Utilization

Total capacity used in year (ton)

Growth

Utilization (New Factory)

Utilization (Total)

- '13-17 CAGR Powdered Milk Capacity outgrows industry (6-8%) due to the outstanding supply

YOGHURT

Yoghurt

*Equal liquild milk's growth

BEVERAGES

Beverages

EXPORTS

VNDm

Powdered milk revenue

Growth

Others revenue

Growth

Total revenue

Growth

COSTS ANALYSIS

Circular Break? 2-Jan-00 1-Jan-00

2-Jan-00

Historical Projected

2009A 2010A 2011A 2012A 2013E 2014E 2015E

35% 32%

10,613,771 15,752,866 21,627,429 26,561,574 32,854,724 39,627,204 48,017,585

6,735,062 10,350,627 14,701,505 17,036,272 21,422,616 25,593,149 30,925,391

3,878,709 5,402,239 6,925,924 9,525,303 11,432,108 14,034,055 17,092,194

1,245,476 1,406,696 1,786,087 2,320,136 2,869,838 3,461,410 4,194,304

292,942 358,685 408,470 465,106 575,302 693,892 840,811

2,340,291 3,636,858 4,731,367 6,740,060 7,986,967 9,878,753 12,057,078

289,533 414,590 534,303 670,075 921,434 1,025,998

3,347,325 4,316,777 6,205,757 7,316,892 8,957,319 11,031,080

439,936 448,296 671,419 487,765 643,289 879,279 1,287,668

196,900 366,519 250,232 293,651 474,809 797,777

78,359 123,566 112,677 86,039 86,535 104,637

173,037 181,334 124,856 263,599 317,936 385,253

184,828 153,199 246,430 51,171 205,550 265,308 320,410

6,253 6,172 13,933 3,115 - - -

(3,674) 42,357 (77,210) (47,149) (39,482) (48,914)

150,701 190,140 125,266 252,699 304,789 369,323

135,959 608,786 237,226 287,317 380,962 459,491 556,781

2,731,358 4,251,207 4,978,992 6,929,668 8,135,593 10,030,782 12,555,120

361,536 645,059 778,589 1,137,572 1,303,417 1,607,048 2,011,476

6,246 9,344 (17,778) (27,359)

2,376,067 3,615,493 4,218,182 5,819,455 6,832,177 8,423,734 10,543,644

375 (693) - - - - -

2,375,693 3,616,186 4,218,182 5,819,455 6,832,177 8,423,734 10,543,644

17%

6,769 10,251 7,717 6,981

351 353 547 834 834 834 834

2,959 4,481 5,060 6,981 8,192 10,101 12,643

803 807 834 834 834 834 834

90% 51% 13% 38% 17% 23% 25%

289,533 414,590 534,303 670,075 921,434 1,025,998

228,581 337,801 448,559 562,542 773,563 861,347

31,490 25,828 25,653 32,172 44,241 49,261

29,462 50,962 60,091 75,361 103,630 115,390

352,802 (22,449) (20,674)

701,993 58,616 38,250

349,191 81,065 58,924

255,983 259,675 307,991

29.3% 48.4% 37.3% 22.8% 23.7% 20.6% 21.2%

36.5% 34.3% 32.0% 35.9% 33.1% 33.5% 33.8%

11.7% 8.9% 8.3% 8.7% 8.7% 8.7% 8.7%

2.8% 2.3% 1.9% 1.8% 1.8% 1.8% 1.8%

22.0% 23.1% 21.9% 25.4% 24.3% 24.9% 25.1%

21.2% 20.0% 23.4% 22.3% 22.6% 23.0%

4.1% 1.1% 0.8% 0.5% 0.8% 0.8% 0.8%

1.7% 1.0% 0.9% 0.5% 0.8% 0.8% 0.8%

1.3% 1.6% 1.2% 1.2% 1.2% 1.2% 1.2%

13% 15% 15% 16% 16% 16% 16%

22.4% 23.0% 19.5% 21.9% 20.8% 21.3% 22.0%

90% 52% 17% 38% 17% 23% 25%

8% 13% 6% 6% 6% 6%

4% 9% 8% 7% 7% 7%

2% 5% 10% 10% 10% 10%

2009A 2010A 2011A 2012A 2013E 2014E 2015E

2,388,098 3,100,363 3,658,794 3,988,086 4,386,895 4,825,584 5,308,142

0.3% 29.8% 18.0% 9.0% 10.0% 10.0% 10.0%

10.0% 10.0% 10.0%

0.0% 0.0% 0.0%

80.0% 80% 80% 80%

22.5% 19.9% 16.9% 15.0% 13.4% 12.2% 11.1%

2,331,473 2,788,004 2,911,303 3,281,398 3,609,538 3,970,492

768,890 870,790 1,076,783 1,105,496 1,216,046 1,337,650

24.8% 23.8% 27.0% 25.2% 25.2% 25.2%

3,268,405 5,180,166 7,171,596 9,024,736 11,118,475 13,697,961 16,875,888

47.5% 58.5% 38.4% 25.8% 23.2% 23.2% 23.2%

10.0% 10.0% 10.0%

12.0% 12.0% 12.0%

52.0% 52% 51% 51%

30.8% 33.3% 33.2% 34.0% 33.8% 34.6% 35.1%

3,527,693 4,959,035 5,866,078 7,227,009 8,903,675 10,969,327

1,652,473 2,212,561 3,158,658 3,891,466 4,794,286 5,906,561

31.9% 30.9% 35.0% 35.0% 35.0% 35.0%

market share tang 1%, market share hien tai la 25%. Market growth la 20% -> company growth la 21%

1,889,251 2,974,937 3,743,242 4,184,792 5,736,340 7,535,280 9,869,969

-20.6% 57.5% 25.8% 11.8% 37.1% 31.4% 31.0%

FORECAST

10.0% 10.0% 10.0%

24.6% 19.4% 19.1%

24.5% 25.0% 27% 28% 30%

17.8% 19.1% 17.3% 15.8% 17.5% 19.0% 20.6%

1,850,411 2,423,408 2,510,875 3,574,521 4,695,506 6,150,335

1,124,526 1,319,834 1,673,917 2,161,818 2,839,774 3,719,633

37.8% 35.3% 40.0% 37.7% 37.7% 37.7%

1,624,756 1,763,012 3,057,508 4,005,335 4,934,573 6,079,394 7,489,813

64.9% 8.5% 73.4% 31.0% 23.2% 23.2% 23.2%

10.0% 10.0% 10.0%

12.0% 12.0% 12.0%

90% 90% 90%

15.3% 11.3% 14.1% 15.1% 15.0% 15.3% 15.6%

902,662 1,898,604 2,283,041 2,960,744 3,647,636 4,493,888

860,350 1,158,904 1,722,294 1,973,829 2,431,757 2,995,925

48.8% 37.9% 43.0% 40.0% 40.0% 40.0%

275,746 902,303 1,223,424 1,646,202 1,975,442 2,370,531 2,844,637

12.0% 227.2% 35.6% 34.6% 20.0% 20.0% 20.0%

20.0% 20.0% 20.0%

0.0% 0.0% 0.0%

2.6% 5.8% 5.7% 6.2% 6.0% 6.0% 5.9%

461,979 746,210 974,970 1,185,265 1,422,319 1,706,782

440,324 477,214 671,232 790,177 948,212 1,137,855

48.8% 39.0% 40.8% 40.0% 40.0% 40.0%

3,354,000.00 71%

1,167,515 1,656,758 2,772,865 3,712,423 4,703,000 5,118,454 5,629,136

1,912,690 3,680,609

1,799,733 1,022,391

67.4% 33.9% 30.1% 8.8% 10.0%

5.0% 5.0% 5.0%

92.4% -1.9% -1.9%

11.0% 10.6% 12.8% 14.0% 14.3% 12.9% 11.7%

1,329,664 2,224,045 2,938,063 3,756,221 4,088,038 4,495,913

327,094 548,820 774,360 946,779 1,030,416 1,133,223

19.7% 19.8% 20.9% 20.1% 20.1% 20.1%

10,613,771 15,577,539 21,627,429 26,561,574 32,854,724 39,627,204 48,017,585

29.3% 46.8% 38.8% 22.8% 23.7% 20.6% 21.2%

100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

10,403,882 15,039,306 17,484,330 21,985,158 26,366,712 31,786,738

5,173,657 6,588,123 9,077,244 10,869,566 13,260,491 16,230,847

33.2% 30.5% 34.2% 33.1% 33.5% 33.8%

Price Increase Volume Increase

per year per year (%)

Condensed Milk 10% 0%

Liquid Milk 10% 12%

Powdered Milk Domestic 10% 19%

Yoghurt 10% 12%

Beverages 20% 0%

Exports 5% -2%

ton 2012A 2013E 2014E 2015E

Domestic Capacity 18,050 22,493 26,861 31,985

Growth 25% 19% 19%

Revenue 37.1% 31.4% 31.0%

- If VNM utilizes maximum its capacity to 2017, its capacity's growth will be 15% for the period '13-17:

ton 2012A 2013E 2014E 2015E

VNM's Export Capacity 15,590 30,000 29,416 28,842

Growth -2% -2%

Export Powdered Milk'sRevenue Growth 7.9% 7.9%

Unitilization rate 2012A 2013E 2014E 2015E

Capacity 33,640 52,493 56,276 60,827

Growth 56.0% 7.2% 8.1%

Utilization rate (Total) 78% 83% 90%

- 13-17 CAGR Powdered Milk Capacity outgrows industry (7%) due to the outstanding supply

1,510

2,012 5-Jul-05 6-Jul-05 7-Jul-05

15-Jan-00 21-Jan-00

12% 12% 12%

1.03% 1.03% 1.03%

13.02% 13.02% 13.02%

660,000

80,000

Forecast

KEY DRIVERS - SENSITIVITY ANALYSIS

Forecast

377,000

480,000 789,063 891,809 1,007,932 1,139,177

47,000 75,100 84,879 95,931 108,422

86,000

356,080 410,313 459,551 514,697 576,460

18,050 22,493 26,861 31,985

15,590 30,000 29,416 28,842

80% 80% 80% 80% 80%

50% 52% 52% 51% 51%

25% 25% 27% 28% 30%

90% 90% 90% 90% 90%

677,150

400,000 800,000 800,000 800,000

13,500 67,500 67,500 67,500

36,000

10% 10% 10%

10% 10% 10%

10% 10% 10%

10% 10% 10%

20% 20% 20%

5% 5% 5%

0% 0% 0%

12% 12% 12%

25% 19% 19%

12% 12% 12%

0% 0% 0%

92% -2% -2%

Powderer Milk Liquild Milk

30-Jan-00 1-Jan-00

76.3% 10.8%

Disposable

Income

1,555

3,215

9.5%

2013-2017

10%

10%

10%

10%

- VNM restructures its plants into separate manufacturing divisions: Liquild milk, yoghurt; Condensed milk; Powder Milk

Revenue CAGR

10%

4-Jul-05 5-Jul-05 6-Jul-05 7-Jul-05 8-Jul-05 9-Jul-05

345,701 382,000 427,840 479,181 536,682 601,084 673,215

410,313 459,551 514,697 576,460 645,635 723,112

10.50% 12% 12% 12% 12% 12%

161,591 183,820 205,879 230,584 258,254 289,245

42% 40% 40% 40% 40% 40%

275,730 308,818 345,876 387,381 433,867

60% 60% 60% 60% 60%

Forecast

Bo sua

Liquild milk

Consumpsion

per capita

(liters)

15

21

27

11.9%

5.2%

Revenue CARG

23.2%

In which

Current factory New factory

67,500 (tons) 13,500 54,000

- VNM wants to win additional 5-10% market share , however, due to the high demand for foreign powdered milk brands

, and it takes time to change the consumer's taste, we only forecast VNM will gain 1.5% current market share per year.

- 2012 capacity: 13,500 tons. This year, from Q2, VNM has launched its new powdered milk plant with capacity 54,000 tons,


18,050 22,493 26,861 31,985 35,708 39,770

25% 19% 19% 12% 11%

37.1% 31.4% 31.0% 22.8% 22.5%


15,590 30,000 29,416 28,842 28,280 27,730

92% -2% -2% -2% -2%

3.0% 3.0% 3.0% 3.0%


33,640 52,493 56,276 60,827 63,988 67,500

56.0% 7.2% 8.1% 5.2% 5.5%

72% 79% 88% 93% 100%

Forecast

Forecast

Forecast

249% 78% 83% 90% 95% 100%

Revenue CARG

23.2%

Revenue CARG

20.0%

7-May-10


- 3,780,000 3,891,673 4,006,645 4,125,014 4,246,880

3.0% 3.0% 3.0% 3.0%

1,050,000 1,365,000 1,774,500 2,306,850 2,998,905

30% 30% 30% 30%

3,712,423 4,830,000 5,256,673 5,781,145 6,431,864 7,245,785

30% 9% 10% 11% 13%

Forecast

Yes

No

Projected

2016E 2017E 1H 2012A 1H 2013A Trailing IS

57,654,501 69,407,053 12,887,269 14,746,852 28,421,157

37,106,275 44,652,441 8,458,758 8,885,104 17,462,617

20,548,226 24,754,612 4,428,511 5,861,748 10,958,540

5,036,083 6,062,660 1,030,988 1,434,530 2,723,678

1,009,558 1,215,351 218,223 264,395 511,278

14,502,584 17,476,601 3,179,300 4,162,823 7,723,584

1,089,783 1,153,585 249,082 329,321 614,542

13,412,802 16,323,015 2,930,218 3,833,502 7,109,042

1,832,638 2,541,345 307,135 251,454 432,083

1,243,906 1,832,784 146,848 160,940 264,323

126,160 151,696 94,039 43,247 61,884

462,572 556,865 66,247 47,267 105,876

387,264 465,325 679 43,723 94,215

- - 3,024 - 91

(56,181) (68,514) (54,943) 13,445 (8,822)

443,445 533,839 52,597 30,278 102,947

668,524 804,799 133,059 73,241 227,499

15,526,700 19,203,835 3,369,732 4,114,473 7,674,409

2,487,558 3,076,677 628,128 765,650 1,275,093

34,515 24,791 (37,083)

13,039,142 16,127,158 2,776,119 3,373,615 6,362,233

- - - - -

13,039,142 16,127,158 2,776,119 3,373,615 6,362,233

3,330 4,047

834 834 834 834 834

15,635 19,338 3,329 4,045 7,629

834 834

24% 24% 22%

1,089,783 1,153,585 249,082 329,321 614,542

914,895 968,459 207,254 283,239 524,544

52,323 55,387 12,976 12,963 25,640

122,564 129,740 28,852 33,120 64,359

20.1% 20.4% 14.4%

34.1% 34.3% 34.4% 39.7% 38.6%

8.7% 8.7% 8.0% 9.7% 9.6%

1.8% 1.8% 1.7% 1.8% 1.8%

25.2% 25.2% 24.7% 28.2% 27.2%

23.3% 23.5% 22.7% 26.0% 25.0%

0.8% 0.8% 2.4% 1.7% 1.5%

0.8% 0.8% 0.0% 0.3% 0.3%

1.2% 1.2% 1.0% 0.5% 0.8%

16% 16% 19% 19% 17%

22.6% 23.2% 21.5% 22.9% 22.4%

24% 24% 22%

6% 6%

7% 7%

10% 10%

2016E 2017E Assumptions

CAGR

5,838,957 6,422,852 10.0%

10.0% 10.0% (2) Condensed milk revenue growth thanks to price growth CARG 9%-10% per year (2013-2017).

10.0% 10.0% Nhom 1; tang deu 9% moi nam, do gia tang 9%

0.0% 0.0% Nhom 2: gia tang 7%, theo lam phat 7%

80% 80% Comment: tot khi tinh den kha nang bao hoa cua thi truong & thi phan hien tai (80%) kho co the tang them duoc.Thuong thi gia se tang cao hon lam phat mot chut, nen gia tang khoang 9-10% se hop ly hon 7%

10.1% 9.3%

4,367,541 4,804,295

1,471,415 1,618,557

25.2% 25.2% - Gross margin = Average GM '10-12

CAGR

20,791,094 25,614,628 23.2% 258 413 578

23.2% 23.2% (3) Liquid milk will grow at 23.2% per year.

10.0% 10.0% Nhom 1: gia tang 9%, san luong: thi truong sua nuoc se tang 12% moi nam den 2015. tang 5% tu 2016 den 2017. Thi phan khong doi.

12.0% 12.0% Volume co the hap thu duoc.

53% 56% Comment: chua tinh den tang truong dan so. Co tinh den kha nang hap thu cua nha may: tot

36.1% 36.9% Nhom 2: gia tang 7%, tang tu 215 len 400 trong 2 nam (2013: 8 thang dau nam 215 trieu lit, 4 thang cuoi dat 400 tr lit, 2014: full capacity 400 trieu lit), 2015-2017: tu 400 trieu lit len 800 trieu lit

13,514,211 16,649,508 Comment: co tinh den toc do tang capacity khi tinh revenue: Tot. Can xem ve kha nang hap thu capacity tang them nay. Giai doan 2 cua nha may can tinh den thoi gian xay dung (2-3 nam). Check lai so lieu ve capacity hien tai: 215 trieu hay 400 trieu lit?

7,276,883 8,965,120

35.0% 35.0% - Gross margin may improve y-o-y thanks to economy of scale & VNM can transfer selling price

market share tang 1%, market share hien tai la 25%. Market growth la 20% -> company growth la 21%to customers thanks to an increasing demand.

CAGR

12,120,691 14,849,813 28.8%

22.8% 22.5% (4) Powdered milk consumption grows at 28.8% for the period 2013-2017

FORECAST

10.0% 10.0% Nhom 1: gia tang 9%, ve tong gia tri (value) cua tang khoang 20%, bang voi toc do tang cua thi truong.

11.6% 11.4% Comment: chua tinh den tang truong ve capacity cua nha may moi?

31% 33% Nhom 2: gia tang 7%, nha may moi (54k) hoat dong tu Thang 4/2013, moi nam tang 13k tan (bang voi cong suat hien tai). Trong 4 nam tang gap 5 lan => CAGR = 50%. Nam dau tang 33.3 (hoat dong 4 thang), nam cuoi tang 66.6% con lai.

21.0% 21.4% Comment: can xem ve kha nang hap thu capacity tang them nay. Neu tinh tang truong nay la cua ca local & export, co the dat duoc volume nhu vay (san luong thua e xuat khau het).

7,552,842 9,253,457

4,567,849 5,596,356

37.7% 37.7% - Gross margin = Average GM '10-12. VNM wants to win market share thanks to its outstanding

capacity & slightly improves its selling price modest compared to its rivals.

CAGR

9,227,449 11,368,218 23.2%

23.2% 23.2% (5) Yoghurt will grow at 23.2% for the period 2013-2017

10.0% 10.0%

12.0% 12.0%

90% 90%

16.0% 16.4%

5,536,470 6,820,931

3,690,980 4,547,287

40.0% 40.0% - Gross margin maintains stable @ 40% due to saturated market & stable demand for the market

leader.

CAGR

3,413,564 4,096,277 20.0%

20.0% 20.0% (6) Beverages grows at 20% for the period 2013-2017

20.0% 20.0%

0.0% 0.0%

5.9% 5.9%

2,048,139 2,457,766

1,365,426 1,638,511

40.0% 40.0% - Gross margin is stable thanks to the growing market.

CAGR

6,262,745 7,055,265 13.7%

11.3% 12.7% (7]) Exports grows at 14.3% for the period 2013-2017

5.0% 5.0%

-1.9% -1.9%

10.9% 10.2%

5,001,968 5,634,942

1,260,777 1,420,322

20.1% 20.1% - Gross margin is stable, not much changed.

CAGR

57,654,501 69,407,053 21.2%

20.1% 20.4% - Revenue CAGR 2013-2017 @ 21.2%

100.0% 100.0% : higher than CEO's guide (18.3%)

38,021,170 45,620,900

19,633,330 23,786,153 33.7% - Average GM is 33,7%, slightly higher than the trend in the past and the company's plan, in range of 30-32%.

34.1% 34.3%

Sales Growth

10.0%

23.2%

31.4%

23.2%

20.0%

3.0%

2016E 2017E CAGR

35,708 39,770 17.1%

12% 11%

22.8% 22.5%

- If VNM utilizes maximum its capacity to 2017, its capacity's growth will be 15% for the period '13-17:

2016E 2017E CAGR

28,280 27,730 12.2%

-2% -2%

7.9% 7.9%

2016E 2017E CAGR

63,988 67,500 14.9%

5.2% 5.5%

95% 100%

- 13-17 CAGR Powdered Milk Capacity outgrows industry (7%) due to the outstanding supply

8-Jul-05 9-Jul-05 ###### 11-Jul-05 12-Jul-05

27-Jan-00

5% 5% 5% 5% 5%

1.03% 1.03% 1.03% 1.03% 1.03%

6.24% 6.24% 6.24% 6.24% 6.24%

Forecast

KEY DRIVERS - SENSITIVITY ANALYSIS

Forecast

1,210,237 1,285,729

115,186 122,371

645,635 723,112

35,708 39,770

28,280 27,730

80% 80%

53% 56%

31% 33%

90% 90%

800,000 800,000

67,500 67,500

10% 10%

10% 10%

10% 10%

10% 10%

20% 20%

5% 5%

0% 0%

12% 12%

12% 11%

12% 12%

0% 0%

-2% -2%

CAGR

17.1%

CAGR

12.2%

CAGR

14.9%

CAGR

3.0%

(2) Condensed milk revenue growth thanks to price growth CARG 9%-10% per year (2013-2017).

Comment: tot khi tinh den kha nang bao hoa cua thi truong & thi phan hien tai (80%) kho co the tang them duoc.Thuong thi gia se tang cao hon lam phat mot chut, nen gia tang khoang 9-10% se hop ly hon 7%

694 798

Nhom 1: gia tang 9%, san luong: thi truong sua nuoc se tang 12% moi nam den 2015. tang 5% tu 2016 den 2017. Thi phan khong doi.

Comment: chua tinh den tang truong dan so. Co tinh den kha nang hap thu cua nha may: tot

Nhom 2: gia tang 7%, tang tu 215 len 400 trong 2 nam (2013: 8 thang dau nam 215 trieu lit, 4 thang cuoi dat 400 tr lit, 2014: full capacity 400 trieu lit), 2015-2017: tu 400 trieu lit len 800 trieu lit

Comment: co tinh den toc do tang capacity khi tinh revenue: Tot. Can xem ve kha nang hap thu capacity tang them nay. Giai doan 2 cua nha may can tinh den thoi gian xay dung (2-3 nam). Check lai so lieu ve capacity hien tai: 215 trieu hay 400 trieu lit?

- Gross margin may improve y-o-y thanks to economy of scale & VNM can transfer selling price

(4) Powdered milk consumption grows at 28.8% for the period 2013-2017

Nhom 1: gia tang 9%, ve tong gia tri (value) cua tang khoang 20%, bang voi toc do tang cua thi truong.

Comment: chua tinh den tang truong ve capacity cua nha may moi?

Nhom 2: gia tang 7%, nha may moi (54k) hoat dong tu Thang 4/2013, moi nam tang 13k tan (bang voi cong suat hien tai). Trong 4 nam tang gap 5 lan => CAGR = 50%. Nam dau tang 33.3 (hoat dong 4 thang), nam cuoi tang 66.6% con lai.

Comment: can xem ve kha nang hap thu capacity tang them nay. Neu tinh tang truong nay la cua ca local & export, co the dat duoc volume nhu vay (san luong thua e xuat khau het).

- Gross margin = Average GM '10-12. VNM wants to win market share thanks to its outstanding

capacity & slightly improves its selling price modest compared to its rivals.

- Gross margin maintains stable @ 40% due to saturated market & stable demand for the market

- Average GM is 33,7%, slightly higher than the trend in the past and the company's plan, in range of 30-32%.

Comment: tot khi tinh den kha nang bao hoa cua thi truong & thi phan hien tai (80%) kho co the tang them duoc.Thuong thi gia se tang cao hon lam phat mot chut, nen gia tang khoang 9-10% se hop ly hon 7%

Nhom 2: gia tang 7%, tang tu 215 len 400 trong 2 nam (2013: 8 thang dau nam 215 trieu lit, 4 thang cuoi dat 400 tr lit, 2014: full capacity 400 trieu lit), 2015-2017: tu 400 trieu lit len 800 trieu lit

Comment: co tinh den toc do tang capacity khi tinh revenue: Tot. Can xem ve kha nang hap thu capacity tang them nay. Giai doan 2 cua nha may can tinh den thoi gian xay dung (2-3 nam). Check lai so lieu ve capacity hien tai: 215 trieu hay 400 trieu lit?

Nhom 2: gia tang 7%, nha may moi (54k) hoat dong tu Thang 4/2013, moi nam tang 13k tan (bang voi cong suat hien tai). Trong 4 nam tang gap 5 lan => CAGR = 50%. Nam dau tang 33.3 (hoat dong 4 thang), nam cuoi tang 66.6% con lai.

Comment: can xem ve kha nang hap thu capacity tang them nay. Neu tinh tang truong nay la cua ca local & export, co the dat duoc volume nhu vay (san luong thua e xuat khau het).

Vinamilk Balance Sheet


2005A 2006A 2007A

Current asset

Cash and Cash Equivalents 500,312 156,895 117,819

Short term investment (Excl bank deposits) 22,800 306,730 654,485

Provision for ST investment

Account receivables 380,232 391,233 504,483

Provision for receivables

Advance to suppliers

Inventories 1,081,501 965,826 1,675,164

Provision for Inventory deduction

ST prepayment

Other current assets 421,632 175,707 225,776

Total current assets 2,406,477 1,996,391 3,177,727

Long term assets

Long term investment 609,960 422,771 401,018

Provision for LT Investment

Tangible Fixed Assets 558,790 746,661 1,022,646

Historical price 1,285,280 1,573,284 1,963,835

Accum depreciation (726,490) (826,623) (941,189)

Intangible Fixed Assets 9,264 9,141 20,715

Historical price 21,003 21,504 38,771

Accum Amortization (11,739) (12,363) (18,056)

Financial Leased Assets

Historical price

Accum Amortization

Property Invesment - - -

Historical price

Accum Amortization

Construction in progress 189,319 316,178 598,309

Goodwill

LT prepayment

Deferred tax assets

Other long-term assets 124,126 118,261 204,702

Total long term assets 1,491,459 1,613,012 2,247,390

Total assets 3,897,936 3,609,403 5,425,117

Current liabilities

Short term debt - - 9,963

Account payable 260,885 436,869 621,376

Deferred revenue

Tax payable

Accrued expenses

Bonus funds

Other current liabilities 1,318,548 348,656 393,640

Total current liabilities 1,579,433 785,525 1,024,979

Long term liabilties

Long term debt 10,410 42,345 32,381

Other long term liabilities 153,381 111,621 107,492

Total long term liabiltities 163,791 153,966 139,873

Total liabilities 1,743,224 939,491 1,164,852

Shareholder equity

Owner investment capital 1,590,000 1,590,000 1,752,757

Share capital surplus 54,217 54,217 1,064,948

Difference in currency - - -

Retained earnings 340,474 342,239 525,757

Investment and development fund 113,263 590,245 744,540

Financial reserve fund 56,632 93,211 136,313

Other funds 126 - 360

Treasury stock - - -

Total shareholder equity 2,154,712 2,669,912 4,224,675

Minority Interest - - 35,590

Total liabilities and owner equity 3,897,936 3,609,403 5,425,117

Check balance - - -

ASSUMPTIONS

Balance Sheet 2005A 2006A 2007A

WORKING CAPITAL

Net working capital days 70 90

Account Receivable Days 21.27 25.00

Inventory Days 75 100

Account payable days 26 35

Working capital turnover

Receivable turnover 17.16 14.60

Inventory turnover 4.90 3.66

Payable turnover 14.04 10.48

Purchases 4,896,957 5,545,621

Other BS Assumptions

Cash as % Revenue 9% 2% 2%

Short-term Investment as % Rev 0% 5% 10%

Reserve for ST investment (% Investment)

Reserve for receivables (% Receivable)

Reserve for inventory (% Inventory)

Advance to suppliers (% Purchase)

ST prepayment (% Rev)

Other Current Assets % of Rev 7% 3% 3%

Long term Investments as % Rev 11% 6% 6%

Reserve for LT investment (% Investment)

Other assets as % of Rev 2.2% 1.8% 3.1%

LT prepayment as % Rev

Deferred revenue as % Rev

Accrued expenses as % Rev

Other Current Liabilities % of COGS 30% 7% 8%

Other liabilities as % COGS 3.5% 2.2% 2.2%

Tax payable as % Rev

Cash Flow Statement 2005A 2006A 2007A

Dividend Payout Ratio

Transfer to funds (% NPAT)

Investment & development Fund

Financial reserve

Bonus fund

Bonus paid-out (% of profit)

Historical Projected

2008A 2009A 2010A 2011A 2012A 2013E 2014E

338,654 2,653,835 2,219,112 3,596,515 4,226,120 5,562,257 10,264,695

374,002 2,227,700 207,277 375,277 1,065,305 773,367 932,785

(70,658) (79,244) (130,029) (173,777) (209,598)

530,002 513,346 587,458 1,143,168 1,269,842 1,714,875 1,885,094

(597) (1,918) (3,853) (3,274) (3,599)

354,096 795,149 576,619 846,143 1,019,272

1,775,342 1,311,765 2,351,354 3,272,496 3,472,845 4,039,743 4,935,388

(4,133) (4,934) (3,455) (5,737) (7,009)

38,595 56,909 72,344 85,477 103,097

169,605 (1,637,488) 237,297 314,264 564,872 557,008 671,827

3,187,605 5,069,158 5,919,803 9,467,683 11,110,610 13,396,084 19,591,952

570,657 698,884 1,250,378 989,065 298,785 369,575 445,757

(96,405) (108,580) (142,351) (14,356) (17,757) (21,418)

1,529,187 1,835,582 2,589,894 3,493,629 4,223,443 7,946,695 8,816,122

2,618,638 3,135,506 4,113,301 5,301,827 6,512,875 10,895,888 12,676,117

(1,089,451) (1,299,924) (1,523,407) (1,808,198) (2,289,432) (2,949,193) (3,859,994)

50,868 39,241 173,395 256,046 253,616 266,618 280,269

79,416 82,340 263,171 383,409 387,180 406,539 426,866

(28,548) (43,098) (89,776) (127,363) (133,564) (139,921) (146,597)

- - - - -

- - - - -

- - - - -

27,489 27,489 100,818 100,671 96,714 92,757 88,801

27,489 27,489 104,060 117,666 117,666 117,666 117,666

- - (3,242) (16,995) (20,952) (24,909) (28,866)

356,868 650,140 665,282 1,295,087 3,565,241 1,780,228 778,667

19,557 15,503 13,662 11,821 9,980

97,741 25,598 41,074 97,848 118,018

62,865 80,643 108,002 132,793 132,793

244,285 257,946 1,879 1,096 1,076 2,305 2,781

2,779,354 3,412,878 4,853,230 6,114,989 8,587,258 10,682,884 10,651,769

5,966,959 8,482,036 10,773,032 15,582,672 19,697,868 24,078,968 30,243,721

188,222 13,283 567,960 - - - -

492,556 789,867 1,089,417 1,830,959 2,247,659 2,571,960 3,233,803

30,515 116,845 21,589 89,283 107,687

399,962 281,789 287,463 333,953 479,158 577,929

297,700 305,418 471,254 555,923 670,518

182,265 259,395 346,373 406,398 518,220 656,092

387,922 349,493 118,236 59,479 664,137 649,061 688,202

1,068,700 1,734,871 2,645,012 2,946,537 4,144,990 4,863,606 5,934,231

22,418 12,454 - - - - -

159,512 243,871 163,583 158,929 59,782 75,174 89,808

181,930 256,325 163,583 158,929 59,782 75,174 89,808

1,250,630 1,991,196 2,808,596 3,105,466 4,204,772 4,938,780 6,024,039

1,752,757 3,512,653 3,530,721 5,561,148 8,339,558 8,339,558 8,339,558

1,064,948 - - 1,276,994 1,276,994 1,276,994 1,276,994

- - - - - - -

803,037 892,345 1,909,022 4,177,446 5,198,758 8,094,310 11,910,243

869,697 1,756,283 2,172,291 908,024 93,889 777,107 1,956,429

175,276 294,348 353,072 556,115 588,402 656,724 740,961

- - - - - - -

- (154) (669) (2,522) (4,504) (4,504) (4,504)

4,665,715 6,455,475 7,964,437 12,477,205 15,493,097 19,140,188 24,219,681

50,614 35,365 - - - - -

5,966,959 8,482,036 10,773,032 15,582,672 19,697,868 24,078,968 30,243,721

- 0 0 0 (0) - -

2008A 2009A 2010A 2011A 2012A 2013E 2014E

100 64 47.2 50.3 45.7 40.6 40.6

23.00 17.94 12.8 14.6 16.6 16.6 16.6

112 84 64.6 69.8 72.3 64.0 64.0

36 37 30.1 34.1 43.2 40.0 40.0

15.87 20.35 28.62 24.99 22.02 22.0 22.0

3.25 4.36 5.65 5.23 5.05 5.7 5.7

10.25 9.78 12.12 10.70 8.45 9.1 9.1

5,711,147 6,271,485 11,390,216 15,622,646 17,236,621 21,989,515 26,488,794

4% 25% 14.1% 16.6% 15.9% 5.0% 5.0%

5% 21% 1.3% 1.7% 4.0% 2.4% 2.4%

-34.1% -21.1% -12.2% -22.5% -22.5%

-0.1% -0.2% -0.3% -0.2% -0.2%

-0.2% -0.2% -0.1% -0.1% -0.1%

3.1% 5.1% 3.3% 3.8% 3.8%

0.2% 0.3% 0.3% 0.3% 0.3%

2% -15% 1.5% 1.5% 2.1% 1.7% 1.7%

7% 7% 7.9% 4.6% 1.1% 1.1% 1.1%

-8.7% -14.4% -4.8% -4.8% -4.8%

3.0% 2.4% 0.0% 0.0% 0.0% 0.0% 0.0%

0.6% 0.1% 0.2% 0.3% 0.3%

0.2% 0.5% 0.1% 0.3% 0.3%

1.9% 1.4% 1.8% 1.7% 1.7%

7% 5% 1.1% 0.4% 1.3% 0.9% 0.9%

2.8% 3.6% 1.6% 1.1% 0.4% 0.4% 0.4%

1.8% 1.3% 1.3% 1.5% 1.5%

2008A 2009A 2010A 2011A 2012A 2013E 2014E

30% 30.0% 30.0%

14% 14% 10.0% 14.0%

5% 1% 1.0% 1.0%

10% 10% 10.0% 10.0%

7.8% 8.9% 8.4% 8.4%

Projected

2015E 2016E 2017E 1H 2013A

16,327,882 25,135,661 35,957,146 4,912,485

1,130,286 1,357,129 1,633,772 733,331

(253,977) (304,949) (367,111) (142,494)

2,477,107 2,760,568 3,544,778 1,485,966

(4,729) (5,270) (6,767) (5,702)

1,227,480 1,473,741 1,774,111 679,488

5,909,680 7,102,931 8,556,007 3,885,037

(8,393) (10,087) (12,151) (3,333)

124,926 149,998 180,574 108,171

814,075 977,456 1,176,705 424,377

27,744,337 38,637,179 52,437,065 12,077,326

540,138 648,541 780,743 299,706

(25,952) (31,161) (37,513) (14,666)

8,579,760 8,279,964 7,916,736 6,071,619

13,454,783 14,233,450 15,012,117 8,616,265

(4,875,024) (5,953,486) (7,095,381) (2,544,646)

294,600 309,647 325,445 273,202

448,209 470,620 494,151 378,238

(153,609) (160,973) (168,706) (105,036)

- - - -

- - - -

- - - -

84,844 80,887 76,930 110,678

117,666 117,666 117,666 133,660

(32,823) (36,780) (40,737) (22,982)

778,667 778,667 778,667 2,072,922

8,139 6,298 4,456 8,191

143,006 171,707 206,708 81,691

132,793 132,793 132,793 132,793

3,369 4,046 4,870 1,076

10,539,363 10,381,388 10,189,835 9,037,213

38,283,700 49,018,567 62,626,900 21,114,539

- - - -

3,757,909 4,636,508 5,468,811 2,036,039

130,488 156,677 188,615 32,846

700,296 840,842 1,012,243 545,089

812,488 975,551 1,174,412 566,056

828,661 1,042,073 1,306,027 238,481

738,246 796,254 867,076 594,657

6,968,087 8,447,905 10,017,183 4,013,168

- - - -

108,519 130,209 156,689 69,898

108,519 130,209 156,689 69,898

7,076,607 8,578,114 10,173,871 4,083,066

8,339,558 8,339,558 8,339,558 8,339,558

1,276,994 1,276,994 1,276,994 1,276,994

- - - -

17,328,550 24,736,431 34,491,203 6,124,774

3,432,540 5,258,019 7,515,822 539,193

833,956 833,956 833,956 755,739

- - - -

(4,504) (4,504) (4,504) (4,785)

31,207,093 40,440,454 52,453,029 17,031,473

- - - -

38,283,700 49,018,567 62,626,900 21,114,539

- - - 0

2015E 2016E 2017E

40.6 40.6 40.6

16.6 16.6 16.6

64.0 64.0 64.0

40.0 40.0 40.0

22.0 22.0 22.0

5.7 5.7 5.7

9.1 9.1 9.1

31,899,683 38,299,526 46,105,516 9,297,295

5.0% 5.0% 5.0% 33.3%

2.4% 2.4% 2.4% 5.0%

-22.5% -22.5% -22.5% -19.4%

-0.2% -0.2% -0.2% -0.4%

-0.1% -0.1% -0.1% -0.1%

3.8% 3.8% 3.8% 7.3%

0.3% 0.3% 0.3% 0.7%

1.7% 1.7% 1.7% 2.9%

1.1% 1.1% 1.1% 2.0%

-4.8% -4.8% -4.8% -4.9%

0.0% 0.0% 0.0% 0.0%

0.3% 0.3% 0.3% 0.6%

0.3% 0.3% 0.3% 0.2%

1.7% 1.7% 1.7% 3.8%

0.9% 0.9% 0.9% 7%

0.4% 0.4% 0.4% 0.8%

1.5% 1.5% 1.5% 3.7%

2015E 2016E 2017E

30.0% 30.0% 30.0%

14.0% 14.0% 14.0%

1.0% 1.0% 1.0%

10.0% 10.0% 10.0%

8.4% 8.4% 8.4%

Vinamilk Cash Flow Statement INDIRECT METHOD

Units: VND million, except per share data Historical Projected

2011A 2012A

Profit before tax 4,978,992 6,929,668

Plus Depreciation & amortization 440,576 535,452

Minus reserve provisions 44,479 (76,755)

Minus Unrealized FX gain/loss

(Gain)/loss from investment activities 8,814 (21,317)

(Income) from interest/dividend (492,527) (362,908)

Gain/Loss from disposal of fixed asset 22,449 20,674

Plus interest expense 13,933 3,115

Cash Flow Before Change in Working Capital 5,016,716 7,027,929

(Inc)/Dec in A/R (555,711) (126,673)

(Inc)/Dec in Inventory (921,141) (200,350)

(Inc)/Dec in Prepaid Expenses 53,829 (30,910)

(Inc)/Dec in Other Current Assets (518,020) (32,078)

Inc/(Dec) in A/P 741,542 416,700

Inc/(Dec) in Other Current Liabilities 40,965 657,504

Change in Working Capital (1,158,536) 684,193

Interest payment (13,933) (3,115)

Tax payment (760,810) (1,045,989)

Other Incomes/(Losses) - -

Cash Flow From Operating Activities 3,083,436 6,663,018

Cashflow from Investing Activities

Capital Expenditure (2,137,685) (3,587,957)

Including:

Change in Tangible Fixed Assets (243,324) (351,599)

Change in Intangible Fixed Assets (120,335) (5,042)

Change in Construction in Progress (1,760,420) (3,231,317)

Changes in properties investment (13,607) -

Income from Fixed asset disposals 58,616 38,250

Changes in ST-LT Financial Investments 93,314 253

Interest, dividends, shared profit from investment 483,713 384,225

Changes in other LT assets (12,942) (25,497)

Cash Flow from Investment Activities (1,514,984) (3,190,727)

Cashflow from Financing Activities

Issuance of new shares 1,454,528 -

Stock Buyback (1,853) (1,982)

Increase / (Pay-off) of ST loans (567,960) -

Increase / (Pay-off) of LT loans - -

Dividend payment (741,428) (2,222,994)

Changes in other LT liabilities (4,654) (99,148)

Other distribution from equity (329,683) (518,562)

Cash Flow from Financing Activities (191,049) (2,842,686)

NET CASH FLOW IN YEAR 1,377,403 629,605

Cash - Beginning 2,219,112 3,596,515

Cash - Ending 3,596,515 4,226,120

Cash on Balance Sheet 3,596,515 4,226,120

Difference (0) (0)

CF Working

Doanh thu Tài chínhFinancial income 680,232 475,239

Lãi cho vayLoan interest 2,445 469

Lãi tiền gửiDeposit interest 366,516 249,763

Lãi đầu tư trái phiếuBond coupon 97,989 77,057

Cổ tức nhận đượcDividends received 25,577 35,620

Lãi FX đã thực hiệnRealized FX gain 133,012 103,439

Lãi do đánh giá lại FXUnrealized FX gain 53,335 -

Thanh lý tài khoản đầu tưDisposal of investment - 8,791

Thu nhập tài chính khácOther financial incomes 1,359 101

Chi phí tài chínhFinancial Expense 246,430 51,171

Hỗ trợ thanh toánSupport for payment 22,668 31,602

Chi phí lãi vayInterest expense 13,933 3,115

Chi phí lãi cho các khoản ký quỹInterest expense for margin services 1,174 1,016

Lỗ FX đã thực hiệnRealized FX loss 105,298 37,855

Lỗ do đánh giá lại FXUnrealized FX loss 60,941 23,750

(hoàn nhập dự phòng)/Dự phòng giảm giáProvision/(reversal of provision) 42,357 (77,210)

Chi phí Tài chính khácOther financial expenses 59 31,043

Lai/(lo) trong cong ty lien doanh lien ketProfit/(loss) in associates (8,814) 12,526

INDIRECT METHOD

Projected

2013E 2014E 2015E 2016E 2017E

8,135,593 10,030,782 12,555,120 15,526,700 19,203,835

670,075 921,434 1,025,998 1,089,783 1,153,585

48,852 41,079 51,427 58,416 72,075

(86,039) (86,535) (104,637) (126,160) (151,696)

(293,651) (474,809) (797,777) (1,243,906) (1,832,784)

- - - - -

- - - - -

8,474,831 10,431,951 12,730,130 15,304,833 18,445,015

(445,034) (170,218) (592,013) (283,461) (784,210)

(566,898) (895,645) (974,292) (1,193,251) (1,453,076)

(69,908) (37,790) (46,817) (53,773) (65,578)

(261,660) (287,948) (350,455) (409,643) (499,619)

324,301 661,842 524,106 878,599 832,303

282,492 270,911 337,182 387,806 473,021

(736,706) (458,848) (1,102,290) (673,723) (1,497,158)

- - - - -

(1,303,417) (1,607,048) (2,011,476) (2,487,558) (3,076,677)

- - - - -

6,434,708 8,366,056 9,616,364 12,143,552 13,871,179

(2,617,359) (798,994) (800,010) (801,077) (802,198)

- - - - -

(19,359) (20,327) (21,343) (22,410) (23,531)

(2,598,000) (778,667) (778,667) (778,667) (778,667)

- - - - -

- - - - -

221,147 (235,599) (291,882) (335,247) (408,845)

379,690 561,343 902,415 1,370,066 1,984,480

(24,179) 1,366 1,252 1,165 1,016

(2,040,700) (471,884) (188,225) 234,907 774,454

- - - - -

- - - - -

- - - - -

- - - - -

(2,501,867) (2,501,867) (2,501,867) (2,501,867) (2,501,867)

15,392 14,635 18,711 21,689 26,480

(571,395) (704,502) (881,796) (1,090,502) (1,348,762)

(3,057,870) (3,191,734) (3,364,952) (3,570,680) (3,824,149)

1,336,137 4,702,438 6,063,187 8,807,780 10,821,485

4,226,120 5,562,257 10,264,695 16,327,882 25,135,661

5,562,257 10,264,695 16,327,882 25,135,661 35,957,146

5,562,257 10,264,695 16,327,882 25,135,661 35,957,146

0 - - - -

Vinamilk Financial Ratios

Units: VND million, except per share data Historical Projected

2010A 2011A 2012A 2013F 2014F 2015F 2016F 2017F

Growth Rates (%)

Sales 48.4% 37.3% 22.8% 23.7% 20.6% 21.2% 20.1% 20.4%

COGS 53.7% 42.0% 15.9% 25.7% 19.5% 20.8% 20.0% 20.3%

Gross profit 39.3% 28.2% 37.5% 20.0% 22.8% 21.8% 20.2% 20.5%

Selling expenses 12.9% 27.0% 29.9% 23.7% 20.6% 21.2% 20.1% 20.4%

Administration expenses 22.4% 13.9% 13.9% 23.7% 20.6% 21.2% 20.1% 20.4%

EBITDA 29.0% 43.8% 17.9% 22.4% 23.2% 21.6% 21.7%

Depreciation and Amortization 43.2% 28.9% 25.4% 37.5% 11.3% 6.2% 5.9%

EBIT / Operating profit 55.4% 30.1% 42.5% 18.5% 23.7% 22.1% 20.3% 20.5%

EBT 55.6% 17.1% 39.2% 17.4% 23.3% 25.2% 23.7% 23.7%

NPAT 52.2% 16.6% 38.0% 17.4% 23.3% 25.2% 23.7% 23.7%

EPS 12.9% 38.0% 17.4% 23.3% 25.2% 23.7% 23.7%

Profitability

Gross profit margin 34.3% 32.0% 35.9% 34.8% 35.4% 35.6% 35.6% 35.7%

EBITDA margin 21.2% 20.0% 23.4% 22.3% 22.6% 23.0% 23.3% 23.5%

EBIT margin / Operating profit margin 23.1% 21.9% 25.4% 24.3% 24.9% 25.1% 25.2% 25.2%

EBT margin 27.0% 23.0% 26.1% 24.8% 25.3% 26.1% 26.9% 27.7%

NPAT margin 23.0% 19.5% 21.9% 20.8% 21.3% 22.0% 22.6% 23.2%

Return on Assets (ROA) 37.6% 32.0% 33.0% 31.2% 31.0% 30.8% 29.9% 28.9%

Return on Equity (ROE) 50.2% 41.3% 41.6% 39.5% 38.9% 38.0% 36.4% 34.7%

ROIC 35.9% 28.6% 31.5% 30.0% 29.2% 28.4% 27.1% 25.8%

Financial leverage

Debt Equity Ratio 0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Debt to Total Asset ratio 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Equity Multiplier 0.74 0.80 0.79 0.79 0.80 0.82 0.83 0.84

Liquidity

Quick Ratio 1.35 2.10 1.84 1.92 2.47 3.13 3.73 4.38

Current Ratio 2.24 3.21 2.68 2.75 3.30 3.98 4.57 5.23

Coverage ratios

Interest coverage (EBITDA/interest) 542 310 1,992 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

CFO/Current liabilities 0.8 0.8 1.3 1.3 1.4 1.4 1.4 1.4

CFO/Interest bearing debt 3.6 No debt No debt No debt No debt No debt No debt No debt

Efficiency

Receivable Turnover 28.6 25.0 22.0 22.0 22.0 22.0 22.0 22.0

Days Receivable Outstanding 13 15 17 17 17 17 17 17

Inventory Turnover 5.7 5.2 5.1 5.7 5.7 5.7 5.7 5.7

Days Inventory Outstanding 65 70 72 64 64 64 64 64

Payables Turnover 12.1 10.7 8.5 9.1 9.1 9.1 9.1 9.1

Days Payable Outstanding 30 34 43 40 40 40 40 40

Business Cycle 47 50 46 41 41 41 41 41

Current Asset Turnover 2.9 2.8 2.6 2.7 2.4 2.0 1.7 1.5

Fixed Asset Turnover 13.6 13.3 12.9 10.4 9.2 10.7 13.2 16.5

Asset Turnover 1.6 1.6 1.5 1.5 1.5 1.4 1.3 1.2

Purchasing 17,236,621

Vinamilk Shareholder Equity


SHAREHOLDER EQUITY 2011A 2012A

Owner investment capital 5,561,148 8,339,558

Share capital surplus 1,276,994 1,276,994

Difference in currency - -

Retained earnings 4,177,446 5,198,758

Investment and development fund 908,024 93,889

Financial reserve fund 556,115 588,402

Other funds - -

Treasury stock (2,522) (4,504)

Total shareholder equity 12,477,205 15,493,097

Retained Earnings 2011A 2012A

Beginning balance 1,909,022 4,177,446

Profit for the year 4,218,182 5,819,455

Transfer to funds (1,208,329) (1,425,622)

Investment & Development fund (10%) (588,625) (814,748)

Financial Reserve (Max (5%, 10% chartered)) (203,043) (32,287)

Bonus funds (416,660) (578,587)

Dividend payment (741,428) (2,222,994)

Increase charter capital - (1,149,527)

Others

Ending balance 4,177,446 5,198,758

Detailed Calculation 2011A 2012A

Share Capital

Beginning balance 3,530,721 5,561,148

New capital 177,534

Bonus/Right issue 1,852,892 2,778,410

Ending balance 5,561,148 8,339,558

Share premium

Beginning balance - 1,276,994

Increase 1,276,994 -

Decrease - -

Ending balance 1,276,994 1,276,994

Treasury stock

Beginning balance (669) (2,522)

Increase (1,853) (1,982)

Decrease - -

Ending balance (2,522) (4,504)

Investment & development Fund (10% NPAT) 14.0% 14%

Beginning balance 2,172,291 908,024

Increase 588,625 814,748

Decrease (1,852,892) (1,628,883)

Ending balance 908,024 93,889

Financial reserve (Max (5%, 10% chartered)) 4.8% 1%

Beginning balance 353,072 556,115

Increase 203,043 32,287

Decrease


Non-equity funds

Bonus fund (10% NPAT) 9.9% 10%

Beginning balance 259,395 346,373

Increase 416,660 578,587

Decrease (329,683) (518,562)


(329,683) (518,562)

Projected

2013E 2014E 2015E 2016E 2017E

8,339,558 8,339,558 8,339,558 8,339,558 8,339,558

1,276,994 1,276,994 1,276,994 1,276,994 1,276,994

- - - - -

8,094,310 11,910,243 17,328,550 24,736,431 34,491,203

777,107 1,956,429 3,432,540 5,258,019 7,515,822

656,724 740,961 833,956 833,956 833,956

- - - - -

(4,504) (4,504) (4,504) (4,504) (4,504)

19,140,188 24,219,681 31,207,093 40,440,454 52,453,029

2013E 2014E 2015E 2016E 2017E

5,198,758 8,094,310 11,910,243 17,328,550 24,736,431

6,832,177 8,423,734 10,543,644 13,039,142 16,127,158

(1,434,757) (2,105,933) (2,623,469) (3,129,394) (3,870,518)

(683,218) (1,179,323) (1,476,110) (1,825,480) (2,257,802)

(68,322) (84,237) (92,995) - -

(683,218) (842,373) (1,054,364) (1,303,914) (1,612,716)

(2,501,867) (2,501,867) (2,501,867) (2,501,867) (2,501,867)

8,094,310 11,910,243 17,328,550 24,736,431 34,491,203

2013E 2014E 2015E 2016E 2017E

8,339,558 8,339,558 8,339,558 8,339,558 8,339,558

8,339,558 8,339,558 8,339,558 8,339,558 8,339,558

1,276,994 1,276,994 1,276,994 1,276,994 1,276,994

- - - - -

- - - - -

1,276,994 1,276,994 1,276,994 1,276,994 1,276,994

(4,504) (4,504) (4,504) (4,504) (4,504)

(4,504) (4,504) (4,504) (4,504) (4,504)

93,889 777,107 1,956,429 3,432,540 5,258,019

683,218 1,179,323 1,476,110 1,825,480 2,257,802

777,107 1,956,429 3,432,540 5,258,019 7,515,822

588,402 656,724 740,961 833,956 833,956

68,322 84,237 92,995 - -

656,724 740,961 833,956 833,956 833,956

406,398 518,220 656,092 828,661 1,042,073

683,218 842,373 1,054,364 1,303,914 1,612,716

(571,395) (704,502) (881,796) (1,090,502) (1,348,762)

518,220 656,092 828,661 1,042,073 1,306,027

Vinamilk Fixed AssetsUnits: VND million, except per share data Historical Projected

FIXED ASSETS 2010A 2011A 2012A 2013E

Tangible Fixed Assets 2,589,894 3,493,629 4,223,443 7,946,695

Historical price 4,113,301 5,301,827 6,512,875 10,895,888

Accum depreciation (1,523,407) (1,808,198) (2,289,432) (2,949,193)

Intangible Fixed Assets 173,395 256,046 253,616 266,618

Historical price 263,171 383,409 387,180 406,539

Accum Amortization (89,776) (127,363) (133,564) (139,921)

Investment Properties 100,818 100,671 96,714 92,757

Historical price 104,060 117,666 117,666 117,666

Accum Amortization (3,242) (16,995) (20,952) (24,909)

Net Depreciation for Tangible 223,482 284,792 481,234 659,761

Depreciation rate 6.17% 6.05% 8.15% 7.58%

Depreciation period 16.22 16.53 12.28 13.19

Net Amortization in year 46,678 37,587 6,201 6,357

Amortization rate 27.02% 11.63% 1.61% 4.03%

Amortization period 3.70 8.60 62.13 24.8

Net Depreciation for Investment Properties 3,242 13,753 3,957 3,957

Depreciation rate 4.93% 12.41% 3.36% 5.16%

Depreciation period 20.29 8.06 29.74 19.4

Total Depreciation & Amortization 273,402 336,132 491,392 670,075

D&A / Sales 1.74% 1.55% 1.85% 2.04%

D&A / COGS 2.64% 2.29% 2.88% 3.13%

COSTSTangible fixed assets

Beginning 3,135,506 4,113,301 5,301,827 6,512,875

Purchased in year 196,359 155,719 278,771

Transferred from CIP 1,146,041 1,130,615 961,162 4,383,013

Sold in year (433,270) (185,412) (101,713)

Other adjustment 68,664 87,604 72,828

Ending 4,113,301 5,301,827 6,512,875 10,895,888

Intangible assets

Beginning 82,340 263,171 383,409 387,180

Purchased in year 33,271 9,139 5,042 19,359

Transferred from CIP

Sold in year (97) (1,271)

Other adjustment 147,560 111,196 0

Ending 263,171 383,409 387,180 406,539

Investment Properties

Beginning 27,489 104,060 117,666 117,666

Purchased in year

Transferred from CIP 12,411 - -

Sold in year

Other adjustment 64,159 13,607 -

Ending 104,060 117,666 117,666 117,666

DepreciationTangible fixed assets

Beginning 1,299,924 1,523,407 1,808,198 2,289,432

Increased in year 276,712 399,310 524,023 659,761

Sold in year (84,079) (104,347) (42,790)

Other adjustment 30,849 (10,172) (0)

Ending 1,523,407 1,808,198 2,289,432 2,949,193

Intangible assets

Beginning 43,098 89,776 127,363 133,564


Sold in year (97) (1,271)

Other adjustment 36,078 26,242 (0)

Ending 89,776 127,363 133,564 139,921

Investment Properties

Beginning - 3,242 16,995 20,952


Sold in year

Other adjustment 424 9,915 -

Ending 3,242 16,995 20,952 24,909

Net book valueRemaining assets 2,864,107 3,850,346 4,573,774 8,306,070

Tangible fixed assets 2,589,894 3,493,629 4,223,443 7,946,695

Intangible assets 173,395 256,046 253,616 266,618

Investment Properties 100,818 100,671 96,714 92,757

Sold assets 349,191 81,065 58,924 -

CONSTRUCTION IN PROGRESS (3,329,013)

Beginning balance 650,140 665,282 1,295,087 3,565,241

Increase in year 1,175,733 1,765,978 3,244,216 2,598,000

Transfer to fixed assets (1,146,041) (1,130,615) (961,162) (4,383,013)

Transfer to investment properties (12,411) -

Transfer to inventory - (4,529)

Sold in year (1,495) -

Other changes (643) (1,030) (12,899)

Ending balance 665,282 1,295,087 3,565,241 1,780,228

2013-2017 PROJECTION

CAPEX PLAN Before 2012 4-Jul-05 5-Jul-05

Vietnam Milk Factory 415,000 1,268,000 654,000

Dielac II Factory 569,000 869,000 400,000

Da Nang Factory 204,000 158,000 14,000

Warehouses 75,000 51,000 201,000

Supply Chain 1,225,000 479,000 554,000

Cow Herding 36,000 189,000 473,000

Others 47,000 19,000 302,000

Total New Capex 2,571,000 3,033,000 2,598,000

Total Tangible assets 5,301,827 6,512,875 10,895,888

Reinvestment rate (% of sales) 0% 16% 14% 10%

Depreciation of Tangible Assets

Old assets 284,792 481,234 481,234

New assets in 2013 178,528

New assets in 2014

New assets in 2015

New assets in 2016

New assets in 2017

Total Depreciation 284,792 481,234 659,761

Amortization of Intangible Assets

Old assets 6,201

New assets in 2013 156

New assets in 2014

New assets in 2015

New assets in 2016

New assets in 2017

Total Amortization 6,357

Assumption

Depreciation period of new assets (year)

Tangible 12.28

Intangible 62.13

Depreciation period of first year (months)

Tangible 6

Intangible 6

Increase in fixed assets (% old assets)

Intangible 5.00%

Projected

2014E 2015E 2016E 2017E

8,816,122 8,579,760 8,279,964 7,916,736

12,676,117 13,454,783 14,233,450 15,012,117 Ending Balance = Beginning balance + Construction in Progress.

(3,859,994) (4,875,024) (5,953,486) (7,095,381)

280,269 294,600 309,647 325,445

426,866 448,209 470,620 494,151

(146,597) (153,609) (160,973) (168,706)

88,801 84,844 80,887 76,930

117,666 117,666 117,666 117,666

(28,866) (32,823) (36,780) (40,737)

910,801 1,015,029 1,078,462 1,141,895

7.73% 7.77% 7.79% 7.81%

12.94 12.87 12.84 12.81

6,676 7,012 7,364 7,733

4.03% 4.03% 4.03% 4.03%

24.8 24.8 24.8 24.8

3,957 3,957 3,957 3,957

5.16% 5.16% 5.16% 5.16%

19.4 19.4 19.4 19.4

921,434 1,025,998 1,089,783 1,153,585

2.33% 2.14% 1.89% 1.66%

3.60% 3.32% 2.94% 2.58%

10,895,888 12,676,117 13,454,783 14,233,450

1,780,228 778,667 778,667 778,667

12,676,117 13,454,783 14,233,450 15,012,117

406,539 426,866 448,209 470,620

20,327 21,343 22,410 23,531

426,866 448,209 470,620 494,151

117,666 117,666 117,666 117,666

117,666 117,666 117,666 117,666

2,949,193 3,859,994 4,875,024 5,953,486

910,801 1,015,029 1,078,462 1,141,895

3,859,994 4,875,024 5,953,486 7,095,381

139,921 146,597 153,609 160,973

6,676 7,012 7,364 7,733

146,597 153,609 160,973 168,706

24,909 28,866 32,823 36,780

3,957 3,957 3,957 3,957

28,866 32,823 36,780 40,737

9,185,192 8,959,204 8,670,498 8,319,110

8,816,122 8,579,760 8,279,964 7,916,736

280,269 294,600 309,647 325,445

88,801 84,844 80,887 76,930

- - - -

1,780,228 778,667 778,667 778,667

778,667 778,667 778,667 778,667

(1,780,228) (778,667) (778,667) (778,667)

778,667 778,667 778,667 778,667

6-Jul-05 7-Jul-05 8-Jul-05 9-Jul-05 Capex Plan 2014-2016 (Unit: VND mn)

12,000

68,000

43,000

294,000

538,000

1,082,000

299,000

778,667 778,667 778,667 778,667 2,336,000

12,676,117 13,454,783 14,233,450 15,012,117

2% 2% 2% 1%

Note:

481,234 481,234 481,234 481,234 2,406,167.82 - Historical price of Tangible Fixed Assets at the ending of year 1 = Historical price of Tangible Fixed Assets at the end of year 0 + Construction in Progress of year 0

357,056 357,056 357,056 357,056 1,606,750.34 - Assume new assets only brought into operation since the beginning of next year

72,512 145,024 145,024 145,024 507,582.81

31,716 63,433 63,433 158,582.30

31,716 63,433 95,149.38

31,716 31,716.46

910,801 1,015,029 1,078,462 1,141,895

6,201 6,201 6,201 6,201

312 312 312 312

164 327 327 327

172 344 344

180 361

189

6,676 7,012 7,364 7,733

6 6 6 6

6 6 6 6

5.00% 5.00% 5.00% 5.00%

Ending Balance = Beginning balance + Construction in Progress.

Capex Plan 2014-2016 (Unit: VND mn)

- Historical price of Tangible Fixed Assets at the ending of year 1 = Historical price of Tangible Fixed Assets at the end of year 0 + Construction in Progress of year 0

- Assume new assets only brought into operation since the beginning of next year

- Historical price of Tangible Fixed Assets at the ending of year 1 = Historical price of Tangible Fixed Assets at the end of year 0 + Construction in Progress of year 0

WACC Analysis - Vinamilk

Discount Rate Calculation - Assumptions

Risk-Free Rate: 8.50%

Equity Risk Premium: 11.57%

Interest Rate on Debt: 10.00%

Comparable Companies - Unlevered Beta Calculation

Levered Equity

Name Beta Debt Value

Mengniu Dairy 0.54 130 7,650

Inner Mongolia Yili 0.88 422 8,965

Bright Dairy 0.94 270 2,877

Yashili 0.84 54 1,661

Modern Farm 0.66 423 1,682

Meiji Dairies Corp 0.68 2,076 4,044

Median 0.76

Vinamilk 0.78

Vinamilk - Levered Beta & WACC Calculation

Unlevered Equity

Beta Debt Value

Vinamilk 0.68 - 115,919,856

Cost of Equity Based on Comparables:

Cost of Equity Based on Historical Beta:

WACCBased on comparables

Based on Historical beta

Unlevered

Tax Rate Beta

14.7% 0.53 Unlevered beta = Levered beta / (1+(1-t)*D/E)

16.8% 0.85

20.1% 0.88

27.2% 0.82

0.0% 0.53

33.2% 0.51

0.68

Levered

Tax Rate Beta

16% 0.68

16.33%

17.47%

16.33%

17.47%

Vinamilk DCF CalculationFCFF Projection

Valuation date: 9/13/2013

Last fiscal year end date 12/31/2012

Year fraction 30%

VNDm 2011A

EBIT 4,992,925

Tax Paid 762,939

EBIAT 4,229,986

Add back:

Depreciation & Amortization Expense 414,590

Minus:

Change in Net Working Capital 1,158,536

Capital Expenditure 2,137,685

Free Cash Flow to Firm (FCFF) 1,348,355

FCFF growth

WACC 16.33%

Discount Period

Discount Factor

Midyear adjustment factor

Present Value of FCFF

Cumulative Present Value of FCFF 71,076,988

Terminal Value (by EV/EBITDA)

Terminal EBITDA (2022E) 28,146,240

Exit Multiple 6.0x

Terminal Value 168,877,440

Discount Factor 0.25

Present Value of Terminal Value 41,380,765

% of Enterprise Value 36.80%

Enterprise Value 112,457,753

112,457,753 5.0x

14.33% 117,335,596

15.33% 111,225,975

16.33% 105,560,959

17.33% 100,302,825

18.33% 95,417,416

5.0x

14.33% 122,248,081

Enterprise Value (VND mn)

Equity Value (VND mn)

Exit Multiple


WA

CC

WA

CC

Exit Multiple

15.33% 116,138,460

16.33% 110,473,444

17.33% 105,215,310

18.33% 100,329,901

140,739 5.0x

14.33% 146,588

15.33% 139,262

16.33% 132,469

17.33% 126,164

18.33% 120,306

1.8% 5.0x

14.33% -2.4%

15.33% -1.6%

16.33% -0.7%

17.33% 0.2%

18.33% 1.0%

37% 5.5x

14.33% 36.7%

15.33% 35.8%

16.33% 34.8%

17.33% 33.8%

18.33% 32.9%

FCFE Projection

VNDm 2011A

Free Cash Flow to Firm (FCFF) 1,348,355

Minus: After-tax Interest Expense 11,804

Add: Net Debt Borrowing (567,960)

Free Cash Flow to Equity (FCFE) 768,590

FCFE growth

Cost of Equity 16.33%

Discount Period

Discount Factor

Midyear adjustment factor

Present Value of FCFE

Cumulative Present Value of FCFE 71,076,988


PV of Terminal Value as % of Enterprise Value

Price per Share (VND)

Implied Perpetuity Growth Rate

Exit Multiple

Exit Multiple

WA

CC

Exit Multiple

WA

CC

WA

CC

WA

CC

FCFE Terminal Value (by growth rate)

Terminal Net income (2022E) 25,972,949

Growth rate 1.8%

Terminal Value 181,793,120

Discount Factor 25%

PV of Terminal Value 44,545,550

As of % of Equity Value 38.53%

Equity Value 115,622,538

115,622,538 -0.2%

14.33% 128,129,402

15.33% 118,135,507

16.33% 109,467,403

17.33% 101,889,371

18.33% 95,217,358

138,643 -0.2%

14.33% 153,641

15.33% 141,657

16.33% 131,263

17.33% 122,176

18.33% 114,176

By other method

FCFE

Net income 4,218,182

Depreciation 414,590

Less Capex (2,137,685)

Less change in WC (1,158,536)

Add debt (567,960)

Total FCFE 768,590

FCFE by old method

Co

st

of

Eq

uit

yC

ost

of

Eq

uit

yPrice per Share (VND)


Equity Value (VND m)


17% 23% 25% 24%

2012A 2013E 2014E 2015E 2016E

6,932,783 8,135,593 10,030,782 12,555,120 15,526,700

1,110,712 1,303,417 1,607,048 2,011,476 2,487,558

5,822,071 6,832,177 8,423,734 10,543,644 13,039,142

534,303 670,075 921,434 1,025,998 1,089,783

(684,193) 736,706 458,848 1,102,290 673,723

3,587,957 2,617,359 798,994 800,010 801,077

3,452,609 4,148,187 8,087,327 9,667,342 12,654,125

20% 95% 20% 31%

- 1.0 2.0 3.0

0.96 0.82 0.71 0.61

1.02 1.08 1.08 1.08

4,055,558 7,167,168 7,364,877 8,287,172

20% 95% 20% 31%

Enterprise Value 112,457,753 FCFF Terminal Value (2022E)

Less: Total Debt - WACC

Plus: Cash and Cash Equivalents 4,912,485 Terminal Value

Implied Equity Value 117,370,238 Implied Perpetuity Growth Rate

Price per Share VND 140,739

Forward P/E 2013E 17.2x

5.5x 6.0x 6.5x 7.0x

121,387,427 125,439,258 129,491,089 133,542,921

114,962,625 118,699,276 122,435,927 126,172,577

109,009,356 112,457,753 115,906,150 119,354,547

103,487,392 106,671,960 109,856,527 113,041,095

98,360,327 101,303,237 104,246,148 107,189,058

5.5x 6.0x 6.5x 7.0x

126,299,912 130,351,743 134,403,575 138,455,406



Exit Multiple

Implied Perpetuity Growth RateImplied Equity Value and Share Price

(VND mn, except per share)

Exit Multiple

119,875,111 123,611,761 127,348,412 131,085,063

113,921,841 117,370,238 120,818,635 124,267,032

108,399,877 111,584,445 114,769,013 117,953,580

103,272,812 106,215,722 109,158,633 112,101,543

5.5x 6.0x 6.5x 7.0x

151,447 156,305 161,164 166,022

143,743 148,223 152,704 157,185

136,604 140,739 144,874 149,009

129,983 133,801 137,620 141,439

123,835 127,364 130,893 134,421

5.5x 6.0x 6.5x 7.0x

-1.1% 0.0% 1.0% 1.9%

-0.2% 0.9% 1.9% 2.7%

0.6% 1.8% 2.8% 3.6%

1.5% 2.7% 3.7% 4.5%

2.4% 3.5% 4.5% 5.4%

6.0x 6.5x 7.0x 7.5x

38.8% 40.7% 42.5% 44.2%

37.8% 39.7% 41.5% 43.1%

36.8% 38.7% 40.4% 42.1%

35.8% 37.7% 39.4% 41.1%

34.9% 36.7% 38.4% 40.1%

2012A 2013E 2014E 2015E 2016E

3,452,609 4,148,187 8,087,327 9,667,342 12,654,125

2,616 - - - -

- - - - -

3,449,993 4,148,187 8,087,327 9,667,342 12,654,125

- 1.0 2.0 3.0

0.96 0.82 0.71 0.61

1.02 1.08 1.08 1.08

4,055,558 7,167,168 7,364,877 8,287,172

Equity Value 115,622,538

Less: Cash & Cash Equivalents 4,912,485 FCFE Terminal value (2022E)

Implied Equity Value and Share Price

(VND mn, except per share)Implied Terminal Multiple

PV of Terminal Value as % of Enterprise Value



Exit Multiple

Exit Multiple

Exit Multiple

Plus: Debt - Net income 2022E

Implied Enterprise Value 120,535,023

Implied P/E

Implied Price per Share VND 138,643

Forward P/E 2013E 16.9x

0.8% 1.8% 2.8% 3.8%

132,470,643 137,504,145 143,409,835 150,435,914

121,654,384 125,692,950 130,375,512 135,869,453

112,346,957 115,622,538 119,381,877 123,740,685

104,265,688 106,947,794 109,998,771 113,500,335

97,193,185 99,407,895 101,907,598 104,751,086

0.8% 1.8% 2.8% 3.8%

158,846 164,882 171,963 180,388

145,876 150,719 156,334 162,922

134,716 138,643 143,151 148,378

125,025 128,242 131,900 136,099

116,545 119,200 122,198 125,607

5,819,455 6,832,177 8,423,734 10,543,644 13,039,142

534,303 670,075 921,434 1,025,998 1,089,783

(3,587,957) (2,617,359) (798,994) (800,010) (801,077)

684,193 (736,706) (458,848) (1,102,290) (673,723)

- - - - -

3,449,993 4,148,187 8,087,327 9,667,342 12,654,125

(2,616) - -



Equity Value (VND m)


24%

2017E 2018E 2019E 2020E 2021E

19,203,835

3,076,677

16,127,158

1,153,585

1,497,158

802,198

14,981,387 16,479,526 18,127,478 19,940,226 21,934,249

18% 10% 10% 10% 10%

34%

4.0 5.0 6.0 7.0 8.0

0.52 0.45 0.39 0.33 0.29

1.08 1.08 1.08 1.08 1.08

8,434,164 7,975,364 7,541,522 7,131,280 6,743,354

18%

FCFF Terminal Value (2022E) 24,127,674

16.33%

168,877,440

Implied Perpetuity Growth Rate 1.8% Formula for terminal value based on growth rate

TermVal=FCFF*(1+g)/(r-g)

g= ( (TermVal/FCFF)*r-1)/ (1+TermVal/FCFF)

g= (TV*r - FCFF) / (FCFF+TV)


2017E 2018E 2019E 2020E 2021E

14,981,387

-

-

14,981,387 16,479,526 18,127,478 19,940,226 21,934,249

34% 10% 10% 10% 10%

4.0 5.0 6.0 7.0 8.0

0.52 0.45 0.39 0.33 0.29

1.08 1.08 1.08 1.08 1.08

8,434,164 7,975,364 7,541,522 7,131,280 6,743,354

FCFE Terminal value (2022E) 181,793,120

Implied Terminal Multiple

25,972,949

7.x

16,127,158

1,153,585

(802,198)

(1,497,158)

-

14,981,387

2022E ASSUMPTIONS

- Stage 1 - 2013-2017 CAGR FCF: 30%

- Stage 2 - 2018-2022 CAGR FCF: 10 %

24,127,674

10%

9.0

0.25

1.08

6,376,530

Formula for terminal value based on growth rate

g= ( (TermVal/FCFF)*r-1)/ (1+TermVal/FCFF)

2022E

24,127,674

10%

9.0

0.25

1.08

6,376,530

Vinamilk

Benchmarking Analysis - Financial Statistics and Ratios

(USD millions, except USD per share data)

Equity Enterprise Shares

Ticker Value ($mn) Value ($mn) Outstanding (mn)

Mengniu Dairy 2319 HK equity 7,650 7,393 1,768

Inner Mongolia Yili 600887 CH equity 8,965 9,091 1,717

Bright Dairy 600597 CH equity 2,877 2,832 1,108

Yashili 1230 HK equity 1,661 1,328 3,557

Modern Farm 1117 HK equity 1,682 2,010 4,849

Meiji Dairies Corp 2269 JP equity 4,044 6,023 74

Vinamilk VNM VN equity 5,392 5,163 834

PriceShares

OutstandingBeta

Ticker ($) (million)

Mengniu Dairy 2319 HK equity 4.33 1,768 0.54

Inner Mongolia Yili 600887 CH equity 5.22 1,717 0.88

Bright Dairy 600597 CH equity 2.60 1,108 0.94

Yashili 1230 HK equity 0.47 3,557 0.84

Modern Farm 1117 HK equity 0.35 4,849 0.66

Meiji Dairies Corp 2269 JP equity 54.90 74 0.68

Vinamilk VNM VN equity 6.47 834 0.78

As of 13 Sep 2013

Market Valuation

General Information

Company

Company

As of 13 Sep 2013

Gross

Gross Net Profit EBITDA

Sales Profit EBITDA EBIT Income EPS (%) (%)

5,897 1,646 370 204 206 0.12 27.9% 6.3%

6,863 2,040 418 269 281 0.16 29.7% 6.1%

2,251 831 128 75 51 0.05 36.9% 5.7%

597 334 100 86 77 0.02 55.9% 16.7%

274 66 54 38 65 0.01 24.0% 19.7%

11,307 4,252 671 260 167 2.27 37.6% 5.9%

1,322 510 331 359 296 0.35 38.6% 25.0%

Leverage Ratios

EBITDA/ EBITDA EBIT/ Debt/

ROE ROA Int. Exp. - Cpx/Int. Int. Exp. Tot. Cap.

(%) (%) (x) (x) (x) (%)

10.1% 6.0% 54.23 7.28 29.88 1.7%

23.4% 8.8% n.m n.m n.m 4.7%

7.8% 3.4% 10.96 (4.31) 6.44 9.4%

11.5% 8.5% 217.54 143.30 188.36 3.3%

7.9% 4.6% 4.63 (26.94) 3.28 25.2%

5.3% 2.1% 43.13 20.35 16.69 51.3%

41.6% 41.3% 1,992 840 2,164 0.0%

LTM Profitability MarginsLTM Financial Statistics ($mn, except EPS - $)

Return on Investment LTM Coverage Ratios

Net

EBIT Income Hist. Est. Hist. Est. Hist. Est.

(%) (%) 1-year 1-year 1-year 1-year 1-year 1-year

3.5% 3.5% -3.5% 16.2% -8.4% 18.2% -21.3% 12.3%

3.9% 4.1% 12.1% 12.1% 17.8% 47.5% -5.7% 15.1%

3.3% 2.3% 16.9% 19.4% 44.8% 24.6% 24.0% 23.0%

14.4% 12.8% 23.6% 22.3% 68.4% 23.5% 53.3% 20.3%

14.0% 23.8% 50.7% 70.8% 28.3% 64.0% 59.5% 10.1%

2.3% 1.5% 1.6% 1.0% 9.0% 9.0% 144.6% 27.3%

27.2% 22.4% 22.8% 23.7% 43.8% 17.9% 38.0% 17.4%

EPS

Growth RateLTM Profitability Margins

Sales EBITDA

Vinamilk

Comparable Companies Analysis

(VND millions, except per share data)

Current % of

Share 52-wk. Equity Enterprise

Ticker Price ($) High Value Value

As of

13-Sep-13

Mengniu Dairy 2319.HK 4.33 99% 7,650 7,393

Inner Mongolia Yili 600887:CH 5.22 96% 8,965 9,091

Bright Dairy 600597:CH 2.60 97% 2,877 2,832

Yashili 1230.HK 0.47 96% 1,661 1,328

Modern Farm 1117.HK 0.35 93% 1,682 2,010

Meiji Dairies Corp 2269.JP 54.90 99% 4,044 6,023

Vinamilk VNM.VN 6.47 99% 5,392 5,163

Maximum

75th Percentile

Median

25th Percentile

Minimum

Company

LTM 2013E LTM 2013E LTM 2013E

Sales Sales EBITDA EBITDA EPS EPS

1.25x 1.08x 19.98x 16.90x 37.19x 33.11x

1.32x 1.18x 21.73x 14.73x 31.94x 27.76x

1.26x 1.05x 22.11x 17.75x 56.55x 46.00x

2.22x 1.82x 13.32x 10.78x 21.69x 18.03x

7.33x 4.29x 37.20x 22.68x 25.83x 23.46x

0.53x 0.53x 8.98x 8.24x 24.20x 19.02x

3.91x 3.16x 15.61x 13.24x 18.22x 15.53x

7.33x 4.29x 37.20x 22.68x 56.55x 46.00x

2.00x 1.66x 22.02x 17.54x 35.88x 31.77x

1.29x 1.13x 20.85x 15.82x 28.88x 25.61x

1.25x 1.06x 14.98x 11.77x 24.61x 20.13x

0.53x 0.53x 8.98x 8.24x 18.22x 15.53x

Enterprise Value / Price /

Vinamilk

Scenario Analysis

(VND millions, except per share data)

Base

CASE 1-Jan-00 Best

Worst

DCF RESULTS (FCFF) BASE BEST

Total EV (VNDm) 112,457,753 167,065,701

Total EqV (VNDm) 117,370,238 171,978,186

Share Price (VND) 140,739 206,220

2013 P/E (x) 17.2x 21.6x

2013 EV/EBITDA (x) 14.1x 18.x

2013 P/B (x) 6.1x 8.5x

Assumptions

Sales growth

Base case

Best case

Worst case

Gross margin

Base case

Best case

Worst case

Working Capital

Receivable days

Base case

Best case

Worst case

Inventory days

Base case

Best case

Worst case

Payable days

Base case

Best case

Worst case

Growth in 2nd stage (2018-2022)

Base case

Best case

Worst case

WORST Ref

77,681,135 112,457,753

82,593,620 117,370,238

99,038 140,739

13.5x 17.2x

10.8x 14.1x

4.5x 6.1x

2013E 2014E 2015E 2016E 2017E

23.7% 20.6% 21.2% 20.1% 20.4%

26.0% 26.0% 26.0% 26.0% 26.0%

18.0% 18.0% 18.0% 18.0% 18.0%

33.1% 33.5% 33.8% 34.1% 34.3%

36.5% 36.5% 36.5% 36.5% 36.5%

31.6% 31.6% 31.6% 31.6% 31.6%

16.6 16.6 16.6 16.6 16.6

14.6 14.6 14.6 14.6 14.6

17.9 23.0 23.0 23.0 23.0

64.0 64.0 64.0 64.0 64.0

64.0 64.0 64.0 64.0 64.0

69.8 69.8 69.8 69.8 69.8

40.0 40.0 40.0 40.0 40.0

43.2 43.2 43.2 43.2 43.2

35.6 35.6 35.6 35.6 35.6

10% 10% 10% 10% 10%

15% 15% 15% 15% 15%

5% 5% 5% 5% 5%

Documents

FGate Vinamilk VNM Model