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OVERVIEW
Vietnam has the rapid economic growth over the coming years which translates
into higher income, in turn benefiting consumerism. GDP per capita in Vietnam is
forecast to more than triple to reach US$4,444 by 2020. Moreover, 51.9% of the
population is estimated to be younger than 30, implying the dynamic opportunities
for consumer good players in particular as this demographic group matures over
time. The immaturity of food & drink sectors which combines with the low existing
per capita food & drink consumption levels in Vietnam implies that considerable
room for growth remains.
According to Nielsens 2013 report, Vietnam is the fastest growing fast-moving
consumer goods (FMCG) market with the growth of 21.5%. Across the FMCGs
categories, beverage, milk, and food set the highest value and growth.


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Furthermore, in the food & drinks reports forecasts, dairy product, beer, food and
confectionary ensure the fast and constant growth until 2017.


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PROPOSAL
Quang Ngai sugar joint stock company (QNS) is famous not only for sugar but also
for the confectionary, beer, soft drink and especially soy milk. According to
Cafbiz.coms following graphs, over 5 years, QNSs sale increase 3.4 times.
Moreover, the net income rise 17 times from 41 billion dongs to 708 billion dongs.





The soya milk products, which accounts for
over 73% of the whole countrys soya
market share with an average growth rate of
161% since 2003, contributes 58% to QNSs
profit in 2012. Thanks for soya milk brands,
QNS becomes one of the biggest company in
consumer goods industry.




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QNS also operates in others fast growing sectors. In alcoholic drink sector, QNSs
beer brand contribute 10% to the companys profit. Moreover, the companys
Biscafun brand has become famous over 10 years in the confectionary industry. At
last, QNS still ranks among the giants in sugar industry.


VALUATION
Besides applying two valuation methods in Vietnam market P/E and P/B, I also use
the EV/EBITDA multiple to estimate the QNSs price more exactly. Because QNS
has many products in food, drink and sugar sectors, I use the average data
estimated by cophieu68.com which includes 30 biggest companies in food, drinks
and sugar sector. The data is calculated in the 23 May 2013. All the data for

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calculating EPS, Book value, EV and EBITDA is extracted from the QNSs financial
statements at the end 2012.The price used to estimate EV is the QNSs average
price in OTC markets transaction in 2013.


1. P/E valuation
The selected P/E = 18.1
QNSs EPS
2012
= 11.740 VND
The estimated price = 212.494 VND/ share
2. P/B valuation
The selected P/B = 4.0
The book value = 24.063 VND/ share
The estimated price = 96.252 VND/ share
The reasonable price for QNSs share is 154.373 VND.

CONCLUSION
Compared with the EV/EBITDA multiple, I realize that the price of QNSs share is
being underestimated deeply. Furthermore, OTC markets transactions show that
the price of share is between 50.000VND to 75.000VND in 2013. This is the best
time to take over this company.




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INDEX