The most valuable blue chip fund you should buy to earn $1000 per month

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Screen Shot 2020-06-02 at 12.30.07 am | A&H Business Technology

Vinamilk is one of the most valuable blue chip fund you should buy in VN-index market. The report below will support you understand more about the firm before you decide to invest.

Executive summary

In term of economic theory, conducting economic analysis of Vinamilk’s situation that based on many concepts will support an insight issue facing this company in Vietnam.

This report will centre on some key economic concepts in a real-world issues that inevitably lead to significant changes in this company.

These appropriate changes have assisted this company to achieve a best position in the domestic market as well as foreign markets during recent years.

Introduction

Founded on 1976, Vinamilk is Vietnam Dairy Products Joint Stock Company that has contributed the largest amount of milk products in market. Vinamilk’s revenue has achieved more than 1.5 billion per year.

This firm has provided approximate 200 diversity products from milk that is divided into four main categories: dairy, juice, coffee and mineral water. Their dominant products are dairy that approximately create the most value in Vinamilk’s total revenue of 98%.

The company’s total assets that government contributes approximately 51% and the rest of their assets are being held by shareholders.

Currently, their products have been consumed in more than 40 countries, including the South East Asian, the Middle East, Africa and other countries.

Market

Dairy market has attracted more and more dairy local and international firms to entrance because of its size, potential and beneficial. There are three main factors to understand the current market of Vinamilk.

Potential market

Vietnam ranks third position of population in Asian area. Therefore, milk market is a potential market that speed of growth is fast, strong and large capacity.

According to Euromonitor (2014), Vietnam has at least over 450 thousand tonnes milk powder deficit from 2014 to 2019 (Graph 3.a).

 

graph milk surplus
Graph 3.a – Source: Euromonitor report 2014-2019

According to government statistic (2015), milk from domestic firms just supplied 35% the demand of milk in local. Thus, the market is high potential and expanding its size in future.

Competitive market

Dairy market has more and more new entrances to join, because of its big benefits. At current time, there are two big local players (Vinamilk and Dutch Lady) that have dominated the local dairy market through occupying more than 72% of dairy market share (Euromonitor, 2015).

Vinamilk has taken the biggest proportion of dairy market share around 55%. However, the market will change significantly when the nation has joined TPP in February 2016.

The dairy market will be come a big place for many high potential foreign companies from New Zealand, Australia and United States. This is a big challenge for domestic companies in general and particularly newcomers.

Market structure

Market structure of dairy product is oligopoly because there are few producers, similar products and significant barriers to join the market in Vietnam (Layton, Robinson & Tucker 2016, pp.245-246).

  • Producers:

According to Eupromonitor’s reports (2015), there are several main producers has contributed milk products to the market consisting of the largest dairy producers in Vietnam Vinamilk, Royal Friesland Campina NV, TH Food Chains JSC, Vietnam Soy Milk Ltd and a few of others.

  • Similar products:

These firms produce the same main products that are being consumed in Vietnam’s dairy market such as infant formula milk powder, fresh milk, ice cream, fruit juice packaged and many kinds of yoghurt. (Picture 3.c.2)

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