A REPORT ABOUT THE PERFORMANCE AND VALUATION OF VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY

HANOI UNIVERSITY FALCUTY OF MANAGEMENT AND TOURISM A REPORT ABOUT THE PERFORMANCE AND VALUATION OF VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Lecturer: Mr Nguyễn Xuân Trường Tutor: Ms Nguyễn Thị Vân Anh Group: 01 Students: Viêm Thị Anh – 1904040010 Đào Thị Dung – 1904040022 Phạm Ngọc Huyền – 1904010044 Trần Ngọc Mai – 1904040075 Nguyễn Thị Thảo Vân - 1904040125 Tutorial Class: 02 Tutorial Time: Monday afternoon, 14h30 – 16h10 Subject: Financial Management Date: May 7th, 2021 i TABLE OF CONTENTS EXECUTIVE SUMMARY .iv Introduction 1.1 General information 1.2 Main business activities 1.3 General stock information 2 Main Body .2 2.1 Financial Statement Analysis .2 a) Financial Statement Information b) Financial Ratios c) Trend Analysis .4 d) Comparative Analysis e) Dupont Analysis f) Strengths and Weaknesses of Vinamilk .7 2.2 Valuation .8 2.2.1 Firm Valuation .8 2.2.2 Intrinsic Value of Stock .9 2.2.3 Recommendation Conclusion REFERENCES .11 APPENDIX A 13 APPENDIX B 14 ii TABLE OF TABLES Table 1: Brief financial statement of Vinamilk as at 31 Dec 2020 Table 2: Financial Ratios of VNM over the period 2016-2020 Table 3: Financial ratios of Vinamilk in comparison with the dairy industry in 2020 .6 Table 4: Calculation of Vinamilk ROE using Dupont equation (2016-2020) Table 5: Expected free cash flow for the 12-year period from 2020 to 2032 iii EXECUTIVE SUMMARY Vietnam Dairy Products Joint Stock Company (Vinamilk) is the most dominant manufacturer and trader of milk, dairy products as well as related equipment in Vietnam Being the enterprise that consecutively leads the dairy products market with diverse products for the national economic life in recent years, Vinamilk has made outstanding growth steps, contributing positively to the development of the dairy product industry In the Vietnamese market, Vinamilk always maintains its position as the best dairy brand and is normally chosen by Vietnamese consumers to purchase for continuous years To obtain these achievements, the company has had effective plans that are directly related to the financial firm and financial market Firm performance is distinctly illustrated in its financial statements especially through intrinsic value of stock Therefore, the following study is conducted based on these findings about Vinamilk’s financial information in order to analyze its performance by indicating ratio analysis and estimate the value of this company through using many financial tools and models learned in the Financial Management subject As a result, we have shown the advantages and drawbacks of the financial firm situation Some recommendations are simultaneously given in this paper with the hope to decide the correct stock price of its firm for investors iv Introduction 1.1 General information “Vietnam Dairy Products Joint Stock Company” is abbreviated to “Vinamilk”, known as the leading enterprise in the dairy processing industry, currently accounting for 75% of the market share of milk in Viet Nam Vinamilk was founded in 1976 as a State-owned enterprise and later formally modified into a joint-stock company in November 2003 In addition, Vinamilk has been enumerated on the Ho Chi Minh Stock Exchange (HOSE) since January 2006 along with the trading code, VNM Vinamilk is headquartered in District 7, Ho Chi Minh City with numerous branches and factories covering 64 provinces and cities in Viet Nam 1.2 Main business activities Vinamilk is the best dairy product manufacturer in Viet Nam with a large number of revenue and outputs in the market Vinamilk is trusted by a lot of consumers in the market because it does not only provide the advanced products but also ensure the nutritional value of products Vinamilk’s product portfolio includes: essential products are milk and powdered milk, yogurt, drink, ice cream, cheese and other products of milk The outputs are provided by Vinamilk with an impressive list of products, flavors and packaging which are produced with advanced technology and high quality of farms in Viet Nam There are more than 200 types of products launched to the market by Vinamilk and conformed to the strict regulation of processing Moreover, Vinamilk is also the leading enterprise in the dairy industry which has domestically a large-scale product distribution network with 183 distributors and nearly 94,000 points of sale in specialized stores of Viet Nam Despite being a well-known brand in Viet Nam, Vinamilk is constantly developing its quality products so as to export to many strict markets such as European & the US Besides, Vinamilk is known as a remarkable trader in the market about technology, equipment and materials for producing food Vinamilk has built 13 factories and 13 farms which applied advanced technologies in breeding and managed following European standards With a lot of experiences in food operation factories, Vinamilk confidently prepares the quality production process and supplies to the raw material market Furthermore, one of the main business activities of Vinamilk is house trading, real estate and transaction intermediation in real estate Vinamilk is a reliable selection in the services of warehouse and delivery products as well as transportation 1.3 General stock information In the market share and production capacity, Vinamilk has the admirable position by dint of possessing the system of mega factories with the huge distribution networks In spite of the impacts of the pandemic, Vinamilk also has continuously achieved more market share with the certain plans of its company The company’s market share maintained at 61% at the end of 2019 The total charter capital of Vinamilk is 17,416,878 million VND until 2020 and the par value of common stock is 10,000 VND The number of outstanding shares is 2,089,955,445 The market price of Vinamilk’s stock is 108,900 VND as of December 2020 Main Body 2.1 Financial Statement Analysis a) Financial Statement Information In fact, financial statements are essential because it consists of all significant financial information of a company, identifying the strengths and weaknesses of the firm by creating the relationship between the balance sheet and income statement and reflecting the financial position of that firm From that, we can calculate financial ratios, and stakeholders can based on that information to evaluate and make suitable economic decisions on their own Some financial accounts which is used to calculate financial ratios and evaluate the strengths and weaknesses of Vinamilk in 2020 is shown in the table as below: Balance Sheet Total Assets 48,432,480 Current Assets 29,665,726 Fixed Assets 13,853,807 Inventories 4,905,069 Account Receivables 5,007,227 Total Liabilities 14,785,358 Current Liabilities 14,212,646 Notes Payable 7,483,918 Owner’s Equity 33,647,122 Income Statement Sales 59,722,908 Net Income 11,235,732 EBIT 13,683,198 Ratio EPS ( Earnings Per Share) 0.00477 Table 1: Brief financial statement of Vinamilk as at 31 Dec 2020 (million dong) b) Financial Ratios Liquidity Ratio Liquidity, including current ratio and quick ratio, reflects the power of Vinamilk to fulfill its short-term obligations using assets that are most readily converted into cash The current ratio is the ratio of current assets to current liabilities point out the company’s ability to respond to its current liabilities with its current assets As calculated shown in Table 2, the current ratio of Vinamilk is around 1.74, showing that Vinamilk has the ability to cover its short-term liabilities by its short-term assets The quick ratio is the ratio of current assets less inventory to current liabilities point out the company's ability to respond to current liabilities with its most liquid assets As shown in Table 2, the quick ratio 2020 of Vinamilk is nearly 2.08, it is a quite good number for Vinamilk Asset Management Ratio Asset management measures how the firm uses its assets efficiently There are three types of asset management ratio: Inventory turnover, day sales outstanding (DSO), Fixed assets turnover (FA turnover) and Total assets turnover (TA turnover) Inventory turnover measures the flow of goods in the form of inventory over a year The higher the inventory turnover, the business will sell fast, which means if the inventory time is lower, the business will sell slowly and more inventory Vinamilk's inventories in 2020 is 12.17 proved that Vinamilk is selling faster and having less inventory Days sales outstanding measures how fast or slow charge is when using credit sales methods (commercial credit) The DSO of vinamilk in 2020 is 31.82, tending to increase It can cause serious cash flow problems FA turnover and TA turnover of Vinamilk in 2020 are 4.31 and 1.23 It can be seen that asset turnover is higher than so this equivalent with the sales of Vinamilk Company is greater than the total asset and the enterprise's ability to manage assets increases, inventories flow quickly, accounts receivable are receivable faster, which is very convenient for the company's business Debt Management Ratio In corporate finance, the degree to which debt is used to finance a company's operations is known as financial leverage Financial leverage has two aspects: Increases profits or Increases risks for the company So, debt management is just as important as asset management The debt to total asset ratio, commonly known as the debt ratio, measures how well the company uses its debt to its assets We can see the debt ratio of Vinamilk in 2020 stay at the level of 0.30 TIE measures a company's ability to pay interest The company's ability to pay interest is high or low, depending on its profitability and its use of debt Times interest earned of Vinamilk in 2020 is 94.14 It can be seen that Vinamilk's ability to pay interest is quite large For businesses, the ultimate goal is profit Profit is a general financial indicator reflecting the efficiency of the entire investment, production, consumption and technical solutions, economic management at the enterprise Operating profit margin measures the ratio of earnings before interest and tax to its sales Operating profit margin of Vinamilk in 2020 is 0.22 reflecting the performance of the company By profit margin ratio, the return on revenue ratio is 18% in 2020, which means that for every 100 VND of revenue, 18 VND of net profit will be generated By basic earning power (BEP), the base return is 27% in 2020, which means that one coin spent will yield 27 VND of profit By return on total assets, 100 VND in assets by 2020 will generate 23 VND of net profit By return on common equity, for every 100 VND of capital spent by common shareholders in 2020, 33 VND of net profit will be generated Market Value Ratio Market value brings in the stock price and helps investors think about the firm Price to earnings ratio is the relationship between the current price of a security and the ratio of earnings per share A low P/E ratio means the higher the company's return on a share, or lower the stock's market value To see if Vinamilk's P / E ratio in 2020 is high or low, investors need to consider P / E of many years ago, or compare P / E of this company with other companies in the same industry or in the same industry economy In general, Vinamilk's P / E ratio in 2020 (22.80) is relatively high c) Trend Analysis Ratio Ratio Formula 2016 2017 2018 2019 2020 Current ratio 2.19 1.59 1.41 1.36 1.74 Quick ratio 2.89 1.99 1.93 1.71 2.08 Inventory turnover 10.38 12.71 9.52 11.31 12.17 DSO 22.44 33.15 32.78 29.27 31.82 5.64 4.81 3.93 3.78 4.31 TA turnover 1.59 1.47 1.40 1.26 1.23 Debt ratio 0.23 0.31 0.29 0.33 0.30 TIE 240.0 416.3 231.2 118.5 95.14 Operating profit margin 0.23 0.23 0.22 0.22 0.22 Profit margin 0.19 0.20 0.19 0.18 0.18 BEP 0.37 0.35 0.31 0.28 0.27 ROA 0.31 0.29 0.27 0.23 0.23 ROE 0.41 0.43 0.38 0.35 0.33 P/E 21.54 32.82 22.66 21.26 22.80 FA turnover Table 2: Financial Ratios of VNM over the period 2016-2020  Liquidity It can be seen that solvency coefficients from 2016 to 2020 are larger than 1, proving that short-term assets, short-term investments are able to offset the debts when incurred Thus, this created crucial advantage in raising capital for business activities further as increased credibility for suppliers of the corporate  Asset Management We can see that Vinamilk's inventories from 2016 to 2020 are getting higher from 10.38 to 12.17 It proves that Vinamilk is growing more and more, selling faster and having less inventory Asset turnover of Vinamilk from 2016-2020 is higher than so this equivalent with the sales of Vinamilk Company is greater than the total asset Therefore, Vinamilk is using its assets efficiently However, this tends to decrease during years together with the increase in Day’s sales in receivable so that this company may have some troubles in the quantity of sale or the increasing in investors combined with the remain stable in sales  Debt Management In debt ratio, creditors often want the company to have a low debt ratio so that the company can better repay the debt In contrast, shareholders often want a high debt ratio because the use of financial leverage increases profitability for shareholders However, if you want to know whether the debt ratio is high or low, you need to compare it with the debt ratio of the industry average The debt ratios over the years tend to stabilize at the level of below 35% In TIE, the use of debt generates profits for the company, but shareholders only benefit when the profits generated are greater than the interest paid for the use of debt The greater the EBIT than the interest, the more likely it is to secure the payments of interest from the guaranteed profit The TIE ratio over the years tend to decrease shown lower ability to pay interest  Profitability We can see that the operating profit margin and profit margin over years to stabilize at the level of below 22% and 18% In 2016, the base return was 37%, which means that one coin spent would yield 37 VND of profit In 2017-2020, one coin of assets spent brings 3531-28-27 VND of profit It can be seen that Vinamilk's underlying profitability declines due to the decline in net profit from operating activities and decline in revenue In addition, the return on equity and the return on assets of Vinamilk have also decreased over time  Market Value As shown in the table above, it can be clearly seen that the P/E of Vinamilk fluctuates over the time period from 2016 to 2020 It is due to the change in the firm’s activities over year, but it still quite high in the whole d) Comparative Analysis Ratio Current Ratio Quick Ratio Inventory Turnover Profit Margin ROA ROE P/E VNM 1.74 2.08 12.17 18.81 23.20 33.39 22.81 Industry 2.03 2.63 6.23 19.52 22.47 28.27 22.16 Comment Low Low High Low High High High Table 3: Financial ratios of Vinamilk in comparison with the dairy industry in 2020 (%) e) Dupont Analysis 2016 2017 2018 2019 2020 ROE 0.4179 0.4305 0.3885 0.3550 0.3339 ROE (%) 41.79% 43.05% 38.85% 35.50% 33.39% Table 4: Calculation of Vinamilk ROE using Dupont equation (2016-2020) Despite fluctuations, the returns on Vinamilk’s equity is generally showing a downward trend in 2016-2020 Looking at the details, the percentage of ROE started at 41.79% in 2016 and then increased slightly at 43.05% in 2017 However, the percentage of ROE following DuPont gradually decreased from 2017 to 2020 In 2018, the ROE index was 38.85%; by 2019, the percentage of the dupont equation had dropped to 35.50% and then reached its lowest level in 2020 at 33.39% The variation of return on equity followed DuPont depends on three factors: profit margin, total asset turnover and equity multiplier Therefore, the decrease in ROE’s Vinamilk is due to net profit margin decreasing gradually, asset turnover did not improve and gradually increased financial leverage f) Strengths and Weaknesses of Vinamilk  Strengths Firstly, Vinamilk is the leading enterprise in Vietnam dairy industry, is the trustworthy brand name in domestic market Up to now, Vinamilk has 12 factories during which there are two biggest factories in Asia and all factories are supplied high-technology with international criteria in manufacturing process Therefore, Vinamilk can take the advantage both in high volume and quality’s products against other competitors Secondly, VNM has wide marketing channel, retailers and supply their products to the supermarket throughout Vietnam, so Vinamilk products can be easy to approach to the users Thirdly, VNM has a good strategy to manage the expenditure to share the price’s burden to the consumer and also get more profit generated from sales Lastly, VNM invests mainly in both fresh and processed dairy products, to create many choices for consumers Recently, Vinamilk added more products like probeauty yogurt, soya milk, Dielac formula powder milk and so on to make products satisfy the needs of all people  Weaknesses First, the imported dairy material constituted quite 70% so it is suffering from the changing in price of global dairy products Second, the strict competition with TH Milk, Dutch Lady in liquid milk, strongly competes with Mead Johnson, Abbott, Nestle and Dutch Lady in powder milk  Recommended strategy for Vinamilk Vinamilk should concentrate on rural markets and markets in newly developing urban areas while continuing to expand the domestic sector By encompassing all of the storage and delivery networks, we can better manage our entire network and increase the delivery system's control Furthermore, as the CEO, we will refresh the advertisement program and adjust the advertising clip to make it more eye-catching, as well as improve the web advertising efforts to increase the number of clients and stabilize The company's promotional and marketing activities in the north, as well as in the rest of the country, must be increased 2.2 Valuation 2.2.1 Firm Valuation To value the firm, Discounted Cash Flow (DCF) model was approached According to Investopedia website, DCF model is used to estimate the value of firm based on its expected free cash flows Particularly, the value of firm today is estimated based on the amount of money that company can generates tomorrow The formula for DCF model is: So, we have calculated Vinamilk’s FCF in 2020 and made assumptions about the expected growth rate of its FCF in order to calculate expected free cash flow for 13 years as shown below: Free Cash Flow FCF 2020 7,129,926 Expected Growth Rate 25% FCF 2021 8,912,408 FCF 2022 11,140,510 FCF 2023 13,925,638 FCF 2024 17,407,047 FCF 2025 21,758,809 FCF 2026 27,198,511 FCF 2027 33,998,138 FCF 2028 42,497,673 FCF 2029 53,122,091 FCF 2030 66,402,614 FCF 2031 83, 003 268 FCF 2032 103,754,085 Table 5: Expected free cash flow for the 12-year period from 2020 to 2032 (mil dong) Next, we have calculated the discounted rate of Vinamilk’s FCF in 2020, which is WACC = 6.96% Then, we applying the DCF formula to figure out the value of Vinamilk: Value of firm = 260,327,694 million dong 2.2.2 Intrinsic Value of Stock From the estimated value of Vinamilk, the intrinsic value of its stock can be found out, using the corporate valuation model, shown as below: Vfirm = Vcommon equity + Vpreferred stock + Vdebt Since Vinamilk does not issue preferred stock, the value of commom stock is equal to value of firm minus value of debt, which is equal to 252,843,776 million dong Hence, the intrinsic value of its stock is equal to value of its common equity divided to number of outstanding shares, equals to 120,978 dong Obviously, the intrinsic value of VNM is higher than its market value as at 31 Dec 2020 (108,900 dong) 2.2.3 Recommendation Vinamilk is indeed an excellent business with continuously growing revenue and profit And in the last years, Vinamilk has always shown its investors that it is an extremely efficient business with the return on equity ratio (ROE) maintained at 30-40% / year The financial situation is transparent, the business cash flow is stable, the debt is at a moderate level It is clear that Vinamilk's financial information, reports and especially the business performance of Vinamilk for many years certainly make Vinamilk's shareholders There is no need to doubt or worry about the management of the business Analyzing clear-reported data, continued growth and market share price fluctuating around VND 110,000, we think you should buy a stock and invest in VNM Although the year 2020 is affected by the Covid-19 epidemic, VNM still has significant growth In addition, VNM's vision for more than 10 years is also developing quite well Besides, If VNM needs money, it should issue more shares instead of borrowing money Conclusion Although 2020 has been a difficult year for almost both domestic and foreign economies, there is still considerable growth in VNM Net income in 2020 is 10,545,331 million VND, an increase of 1.12 times compared to year 2016 Sale is 56,400,229 million VND (increase by 1.2 times compared to year 2016) and it makes total assets up to 58 million VND ROE also fluctuates in the 30-40% range In short, all of these data shows that VNM has been doing well It brings significant signs to the Vietnamese economy By means of analyzing data on the financial situation of VNM through the years period, we hope readers have a clearer overview of the Vinamilk situation REFERENCES Author (2021, April 22) Vinamilk remains leader in liquid milk market in Vietnam Nhan Dan Online Retrieved from https://en.nhandan.org.vn/business/item/9797502- vinamilk-remains-leader-in-liquid-milk-market-in-vietnam.html Author (2021, May 6) 13 nhà máy Vinamilk đạt sản xuất 28 triệu hộp sữa ngày Nhan Dan Online Retrieved from https://nhandan.com.vn/thong-tin-doanh-nghiep/13nha-may-cua-vinamilk-dat-san-xuat-hon-28-trieu-hop-sua-moi-ngay-644796/ Nguyen, N H (2010) Phân tích tài cơng ty Vinamilk Retrieved from https://www.academia.edu/13791895/Ph%C3%A2n_t%C3%ADch_t%C3%A0i_ch %C3%ADnh_c%C3%B4ng_ty_Vinamilk?fbclid=IwAR0EGoflxk3yhmsVZbymn9YGw9Dc7ksp_OwlW0sUkdMEGuNLnCj9BsYO2Y Stockbiz (2021) CTCP Sua Viet Nam (VNM: HOSE) Retrieved from https://www.stockbiz.vn/Stocks/VNM/MajorHolders.aspx Tap Doan Vinamilk (2012) Retrieved from https://sites.google.com/site/suabovinamilk1993/1 -tap-dhoan-vinamilk/a-gioi-thieuchung Tieu luan phan tich tai chinh cua Vinamilk (2019) Retrieved from https://hotroontap.com/wp-content/uploads/2019/04/Ti%E1%BB%83u-lu%E1%BA %ADn-Ph%C3%A2n-t%C3%ADch-t%C3%A0i-ch%C3%ADnh-c%E1%BB%A7aVinamilk.pdf?fbclid=IwAR1T65LMJN6xUaCkI6lE66mXUmSRABEH7USqXZJqJiyd0S1xyQXVlIn5FI Vinamilk (2019, December 31) Bao cao thuong nien 2019 Retrieved from https://www.vinamilk.com.vn/static/uploads/bc_thuong_nien/15852915967f525505f3621558355a60c10f6862cbb3b9c9863921a9b06587f7b42a0f9733.pdf VNM Bieu chung khoan (2021) Retrieved from https://vn.tradingview.com/symbols/HOSE-VNM/ Tap Doan Vinamilk (2012) Retrieved from https://sites.google.com/site/suabovinamilk1993/1 -tap-dhoan-vinamilk/a-gioi-thieuchung 10 Tieu luan phan tich tai chinh cua Vinamilk (2019) Retrieved from https://hotroontap.com/wp-content/uploads/2019/04/Ti%E1%BB%83u-lu%E1%BA %ADn-Ph%C3%A2n-t%C3%ADch-t%C3%A0i-ch%C3%ADnh-c%E1%BB%A7aVinamilk.pdf?fbclid=IwAR1T65LMJN6xUaCkI6lE66mXUmSRABEH7USqXZJqJiyd0S1xyQXVlIn5FI Da Nang Dairy Factory: factories will be operating in the second quarter 2013 (2013) Retrieved from https://www.coursehero.com/file/p6ud9dt/Da-Nang-Dairy-Factory-2factories-will-be-operating-in-the-second-quarter-2013/ Nguyen, T N T (2013) A case of Viet Nam Dairy Products Joint Stock Company (VNM) Retrieved from https://www.academia.edu/7811573/BUSINESS_ANALYSIS_AND_VALUATION_A _Case_of_VIETNAM_DAIRY_PRODUCTS_JOINT_STOCK_COMPANY_VNM? fbclid=IwAR3udAXPGhJT6mqXgHbzWqPvCS5V_3mZhMu2Q3OR8VJAwwKrOzyuN_E_Hw 11 APPENDIX A Calculation of Dupont equation Dupont formulas: ROE = ROA * Equity Multiplier ROE = Profit Margin * Total Assets Turnover * Equity Multiplier ROE = Accounts used to calculate ROE 2016 2017 2018 2019 2020 Net Income 9,363,829 10,278,174 10,205,629 10,554,331 11,235,732 Sales 46,965,003 51,134,899 52,629,230 56,400,229 59,722,908 Total Assets 29,378,656 34,667,318 37,366,108 44,699,873 48,432,480 Total Equity 22,405,949 23,873,057 26,271,369 29,731,255 33,647,122 Profit Margin 0.1994 0.2010 0.1939 0.1871 0.1881 TA Turnover 1.5986 1.4750 1.4085 1.2618 1.2331 Equity Multiplier 1.3112 1.4522 1.4223 1.5035 1.4394 12 APPENDIX B Calculation for the firm valuation Calculate WACC Since Vinamilk does not have preferred stock, the cost of capital now consists of cost of debt and cost of common equity only a Cost of components Cost of Debt Before-tax cost of debt = 2.22% Corporate tax rate = 20% After-tax cost of debt = Before-tax cost of debt * (1 – Tax rate) = 1.776% Cost of Equity CAMP approach: Rs = rf + beta*(rm-rf)  Risk free rate: rf = 2.28% (Vietnam 10-year-yield government bonds)  Risk premium (rm – rf) = 8.21% (from Damodaran’s equity risk premium estimate of Vietnam)  Beta = 0.71 (taken from Vietstock website) Therefore, re = 2.28% + 0.71 * 8.21% = 8.11% b Weighted on Debt and Equity Weighted on Debt = = 18.20% Weighted on Equity = = 81.80% Then, based on the above information, we can calculate WACC as below: WACC 2020 = Wd * after-tax rd + We * re = 18.20% * 1.776% + 81.80% * 8.11% = 6.96% Calculate FCF and expected FCF We calculate FCF of 2020 using the following formula: FCF 2020 = (EBIT * (1- T) + Depre & Amort.) – (CAPEX + delta NOWC) 13  EBIT = 13,683,198  Depre and Amort = 2,208,866  CAPex = 851,162  Delta NOWC = 5,174,336 Applying the formula above, we have: FCF 2020 = (EBIT * (1- T) + Depre & Amort.) – (CAPEX + delta NOWC) = (13,683,198 * (1 - 20%) + 2,208,866) – ( 851,162 + 5,174,336) = 7,129,926 We assumed that the FCF of Vinamilk will growth at the constant rate of 25%, and we calculated the following expected cash flow by multiple the previous cash flow with the stable growth rate, and the results of expected cash flow for the 13-year period is shown in Table Calculate value of firm Value of firm is estimated by the below equation: Value of firm = FCF 2020/(1+ WACC)+FCF 2021 /( 1+WACC)^2 +…+ FCF 2031 / (1+WACC) ^ 12 + FCF 2032 / (1+WACC) ^ 13 = 260,327,694 Calculate intrinsic value of stock In order to calculate the intrinsic value of VNM, we have to determine the value of Vinamilk’s common equity and divided it by number of outstanding shares Value of common stocks = Value of firm – Value of debt = 260,327,694 – 7,483,918 = 252,843,776 Number of shares outstanding = 2,090 Intrinsic value = Value of common stocks / number of shares outstanding = 252,843,776/ 2,090 = 120,978 14 MEMBER’S CONTRIBUTION Name Contribution Viêm Thị Anh 100% Đào Thị Dung 100% Phạm Ngọc Huyền 100% Trần Ngọc Mai 100% Nguyễn Thị Thảo Vân 100% 15 Signature ... case of Viet Nam Dairy Products Joint Stock Company (VNM) Retrieved from https://www.academia.edu/7811573/BUSINESS_ANALYSIS _AND_ VALUATION _A _Case _of_ VIETNAM_ DAIRY_ PRODUCTS_ JOINT_ STOCK_ COMPANY_ VNM?... SUMMARY Vietnam Dairy Products Joint Stock Company (Vinamilk) is the most dominant manufacturer and trader of milk, dairy products as well as related equipment in Vietnam Being the enterprise that... performance by indicating ratio analysis and estimate the value of this company through using many financial tools and models learned in the Financial Management subject As a result, we have shown the