How F&N’s earnings can find nourishment in Vinamilk

SINGAPORE (March 24): RHB Research is confident that Fraser & Neave’s (F&N’s) recent move to increase its stake in Vietnam Dairy Products, otherwise known as Vinamilk, is to power the group’s earnings growth ahead. 

In an unrated report on Friday, analyst Goh Han Peng says that while the research house does not have a formal rating or target price for F&N, its back-of-envelope sum of parts (SOP) valuation suggests a fair value of $2.76 per share.

Since Dec 2016, F&N has spent some $850 million to raise its stake in the Vietnamese dairy company from 11% to 17%, resulting from the Vietnamese government’s intention to reduce their stake in state-owned enterprises through a privatisation drive.

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