Investors are looking for good stocks preparing for a new growth cycle like VNM.

Many people think that now is the selling cycle of the stock market, but there are also many completely opposite opinions, they think that many good fundamental stocks have long been neglected by hot money and now is the opportunity for these stocks to return, adding strength to the stock market.

To provide investors with more information for their evaluation, we interviewed Ms. Tran Thi Thuy Duong - Business Director, Head Office, SSI Securities Corporation. Ms. Duong has many years of experience in the securities field and regularly works with clients who are investors.

Ms. Tran Thi Thuy Duong - Business Director, Head Office, SSI Securities Corporation.

Dear Madam, the stock market is in a period ofShocking increase and then deep decrease, many investors do not know what to dobuy or sell is correct. How do you see investment opportunities in the future?

Anytime we participate in the stock market, we have opportunities, because businesses on the stock market are the best representatives of the economy. We are a country with GDP growth in the region, which means that in every stage of the economy, there are still businesses that operate effectively and bring many opportunities for investors to invest in businesses.

In the past, the market has had sessions of shocking increases and then sharp decreases. I think that is the development of all financial markets in the world. This can happen in all cycles, both up and down. Even in the sideways cycle of the market, this state sometimes occurs due to the short-term expectation psychology created by investors. I think investors should look deeper into the market developments, find more support consultants to be able to choose better stocks, have orientations to choose good fundamental businesses to invest in for the long cycle, not just look at the fluctuations of the index in a narrow time frame.

Many investors believe that many stocks have doubled or tripled in value over the past two years and now is the time to sell. According to her,thisIs it reasonable?

I completely disagree with this view. As I shared above, currently on HoSE, HNX, UpCOM there are about 1,800 stock codes. Although each code has its own characteristics, there are businesses that do well and there are also a few businesses that do the opposite, but overall, these 1,800 businesses are the best representatives of the health of the economy. So at any time of the market, we can find cheaply priced assets to invest in.

Besides, the economy and businesses are cyclical. The fact that a stock has doubled or tripled in the past 2 years is because these businesses have seized the opportunity in this cycle, helping to increase revenue and profit dramatically during that time. And if that opportunity is still taken advantage of in the next cycle of the economy, then continuing to invest and hold is still effective. We can find many examples of such businesses on any stock market, not just in Vietnam.

Back to the investment story at this point, I am seeing a lot of investment opportunities as the economy reopens and government policies are supporting economic recovery.We see that many businesses have prepared very well for this new cycle, and I think those businesses will develop very well in the coming time.Every investor who reads this article will probably have some idea of ​​the businesses that I am referring to. Investors should always remember that at any given time, there are industries and businesses that benefit from the new economic cycle.

Can you cite some stocks with that nature?

(Laugh)As an investment asset management consultant for clients, I have a habit of sharing very detailed information about the industry and the businesses that are effective in that industry when recommending investments. I do not want my clients to receive wrong information about investments leading to undesirable results. Therefore, with the duration of today's interview, it will be very difficult for me to share all the information about many stocks. I will only give an example here of a stock that is well-known and has been discussed by many people recently, which is Vinamilk's VNM stock.

Recently, I have also received many questions about whether or not to invest in Vinamilk. Perhaps, when asking this question, the questioners themselves are also finding that... there is something illogical about the stock price of a good business falling. When asking, I know that investors are also trying to find more reasons to buy but are not sure, so they should find other arguments to strengthen it. In fact, many investors are in a state of uncertainty because their thinking is leading them to invest in Vinamilk because VNM is a good, sustainable, well-governed stock, but their short-term psychology is leading them to actions that are not consistent with their thinking. They look at the short-term movements of stock prices, the general market movements, and the movements of other stocks and compare them, leading to somewhat influenced investment decisions.

The farm in Quang Ngai is one of three farms in Vinamilk's Green farm ecological farm system.

I see many analysts saying that Vinamilk is under pressure from rising raw material prices and logistics costs. Is the investment risky?

The story of raw material prices and logistics costs, we all see how it has impacted the economy, manufacturing enterprises... I emphasize that impacting the economy means deeply and widely impacting many industries, not just Vinamilk. Vinamilk is just one of the enterprises in the economy and facing this global challenge. The question investors ask businesses, I think, is not when this increase in raw material prices will stop, but what businesses have done/are doing and will do when this situation occurs.

In my opinion, investors should choose businesses that have been controlling input costs well, such as Vinamilk. Vinamilk has managed input costs quite effectively, with its gross margin decreasing at a slower rate than the increase in input milk prices (raw milk prices increased by 50% while Vinamilk's gross margin only decreased by about 5-6%). If we look closely at Vinamilk's strategies in recent years, I think Vinamilk has prepared very carefully for the scenario. For example, sugar is a key input material in Vinamilk's production, so this business has made a move to buy Vietsugar to proactively respond. The same goes for milk materials, Vinamilk has invested heavily in building raw material areas to reduce the impact on business efficiency. According to Vinamilk's 2021 year-end report, the total output of fresh milk supplied in 2021 is the highest ever, reaching approximately 380 thousand tons. In addition, with the addition of new farms such as the Quang Ngai farm and the complex project in Laos (phase 1 scale is 8,000 cows) expected to come into operation in 2022, Vinamilk's ability to self-supply raw milk materials will be further increased. Vinamilk also often signs term contracts with raw material suppliers to reduce the risk of price fluctuations.

Vinamilk's flexibility in each stage of the economy also shows that the company has deeply participated in the supply chain from raw material areas to product distribution, so we will not have to worry much about controlling costs well from input to output. Even investors must seeThis is a good investment opportunity.when other businesses do not have that advantage!

So now the question is when is the right time to invest effectively in VNM. According to our analysis, the dairy industry accounts for 14% of the total global agricultural trade turnover. The demand for milk in Vietnam and the Asian region is very low compared to the world average. So in terms of the industry's development potential, we can agree that this is a completely potential industry in the short - medium - long term.

After realizing the industry potential, investors should look back at VNM once again. Many people say that VNM has no chance of high growth when it approaches 50% of the industry's market share, but they have not considered 2 factors:

- Firstly, Vinamilk is expanding its presence in Asian countries, especially China, which has the largest population potential in the world today. Vinamilk's export segment is also highly expected thanks to its continuous double-digit growth over the years, with profit margins even higher than domestic ones. In 2021, the company developed 2 new export markets, bringing the total number of cumulative export markets to 57.

- Second, Vinamilk has been planning to expand its product portfolio and many products other than cow's milk such as fruit juice, nut milk, beef... In particular, phase 1 of the beef cattle project is expected to come into operation in 2023-2024 with a capacity of 30,000 beef cattle/year, the first year's revenue is expected to be 2,000 billion VND, so according to my analysis, we will see strong growth in Vinamilk's revenue in the coming time, not only stopping at 6x trillion, but can reach higher numbers in the following years.

VNM's current valuation by different methods has been stated by many securities companies and analysts, so I will not say more, but personally, I find the current price range of 7-8x to be a really attractive range for investment and holding. If investors learn the word "Patience", they will not only receive a very high annual cash flow from dividends, but also hold a growing business with a lot of financial potential and completely transparent investment information.

Vinamilk's dairy products attracted consumer attention when participating in the international food fair in Shanghai at the end of 2021.

Usually with "less game" businesses like VinamilkWhich group of investors will favor it?

(Laugh)My advice to any investor when participating in the market, we must have a clear direction with our capital when disbursing. If you determine that capital is used for trading, you should observe stocks with strong fluctuations, those fluctuations create opportunities for you to make money quickly. But if you determine that capital is for investment, choose good assets to hold for the long term, where we have safety and can disburse with capital from small to large in the long term. I also have to add, trading can bring short-term joy (or sadness) as soon as you place an order. But, investing will help you develop assets in the long term.

Thanks for sharing.

Yes, thank you for interviewing me. I hope that through this sharing session, investors can have a better perspective on the market and not miss out on upcoming investment opportunities. For any questions, investors can contact me via email:[email protected]I am happy to advise and share investment perspectives to help investors grow their assets in the long term.