F&B businesses are making efforts to recover from Covid-19. Photo: H.Dịu

Which F&B group has growth opportunities?

According to the statistics of Mirae Asset Securities, the total revenue of 78 listed F&B companies in 2021 reached VND279,000 billion, up 5.6% over the same period last year.

However, the rapid increase in production costs reduced the gross profit margin, leading to the gross profit of F&B enterprises in general increasing by only 1.1% over the same period last year. Not only that, the high cost of disease prevention and the efforts of enterprises to stimulate consumption led to a rapid increase in selling and administrative expenses. As a result, the profit from core business activities in 2021 of F&B businesses decreased by 2.3% to VND33,935 billion.

Entering 2022, businesses in this industry are trying to recover from Covid-19 but are affected by tensions from the Russia-Ukraine conflict. Russia and Ukraine are the two largest wheat exporters in Europe. Not only that, Russia is also a major supplier of oil, gas, sunflower seed oil, fertilizer and iron and steel in the world.

Therefore, the prices of some basic food commodities such as wheat, soybeans, butter, corn, etc. have increased to their highest levels in many years.

However, according to experts of Mirae Asset, seafood export and food export are the two groups of F&B businesses that have the best opportunity to increase profits in 2022.

Vietnam is the world's largest pangasius exporter, and is a direct competitor of Minh Thai fish from Russia. Therefore, enterprises exporting pangasius and other aquatic products will directly benefit. Beverage businesses have a chance to grow before Vietnam reopened most services.

Profit target differentiation

With the above opportunities, F&B businesses have set very high profit plans. Vinh Hoan Joint Stock Company recently submitted to shareholders a plan for net revenue of VND13,000 billion, up 44% over the same period and profit after tax in 2022 is expected to reach VND1,500 billion, up 36%. In addition, the enterprise dubbed the "queen of pangasius" also plans to spend VND1,530 billion to invest in building a number of processing plants in 2022.

In the beverage sector, Saigon Beer - Alcohol - Beverage Corporation (Sabeco) plans to set a target of net revenue of VND34,791 billion, profit after tax of VND4,581 billion, up 32% and 17% respectively compared to the performance in 2021.In the same field, Cuu Long An Giang Seafood Import-Export Joint Stock Company expects net revenue of VND1,450 billion (up 20%) and pre-tax profit of VND200 billion, four times higher than the previous year. The multinational development and Investment Joint Stock Company expects to bring in VND8,300 billion in net revenue (up 45%) and VND900 billion in profit after tax in 2022, equivalent to 6.6 times higher than the previous year.

Sabeco's report stated that by the end of 2021 and the beginning of 2022, the bright spot for the recovery of socio-economic activities in general and the beer production and trading industry, in particular, is the development of stimulating demand for tourism and restaurant activities. However, the beer production and trading industry still face challenges due to the increase in input material prices, scarcity of goods, traffic congestion and high transportation costs.

With Masan Consumer Goods Joint Stock Company (MCH), this is the largest packaged food producer in Vietnam with the main products being spices, instant noodles, processed meat, beverages, etc. The increase in raw material prices will have little impact on MCH's profit growth as the products are mainly in the high-end segment. Not only that, MCH also has revenue from beverages (both non-alcoholic and alcoholic) along with laundry products, which are product groups that will have high growth potential when the market recovers.

However, there are many businesses that are quite "conservative" to make profit plans for 2022. Mekong Seafood Company plans to increase profits, with an increase of more than three times the previous year.

According to the company's management, the traditional export market is limit ed because of increasingly complex technical barriers. The negative impact of the Covid-19 pandemic is large, especially the increase in input costs and the fluctuation of the labor force. Besides, unfair competition in the industry such as dumping, and competition for customers, continues and has caused input prices to increase rapidly while selling prices cannot keep up.

As for Dabaco Vietnam Group Joint Stock Company, in 2022, the company's management sets a target of VND22,558 billion in revenue and VND918 billion in profit after tax.

According to Mr. Nguyen Nhu So, Chairman of the Board of Directors of Dabaco, the announced business targets are based on the growth momentum from available internal resources and market factors in a prudent, feasible and uncalculated manner to projects that are being implemented such as the project of Hi-tech Livestock Zone in Thanh Hoa, Phu Tho (expansion), the project of Plant Oil Production Phase 2, Vaccine Factory.

However, this profit increased by about 10% compared to 2021, but the profit result of 2021 decreased by 40.7% compared to 2020.

In addition, Dabaco's management also said that 2022 is forecast to continue to be a difficult year due to the Covid-19 pandemic, accompanied by a disruption in the supply and consumption with signs of re-emergence of avian influenza and African swine fever outbreaks, directly affecting the organization of rearing of the herd.