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Mooncake makers to rally on festival, Sacombank says
Vietnam’s three biggest listed confectionery makers will rally in coming weeks ahead of the Mid-Autumn Festival, according to Sacombank Securities Inc.
Vietnamese traditionally give mooncakes to family and friends during the festival, one of the country’s most popular after the Lunar New Year. The celebrations are on the 15th day of the eighth month in the Chinese calendar, which falls on October 3 this year.
“Confectionery, cake and beverage products will be strongly consumed during this event,” Le Ba Hoang Quang, Hanoi-based head of research at Sacombank Securities, Vietnam’s third-biggest brokerage, said in an interview on Monday.
Kinh Do Corp., Bibica Corp. and North Kinh Do Food Joint-Stock Co. are the country’s largest listed confectionery producers.
Investors should buy shares of Kinh Do, Vietnam’s biggest listed confectionery maker, Sacombank Securities said. Ho Chi Minh City-based Kinh Do has rallied 88 percent this year, outpacing the benchmark VN Index, which rose 56 percent.
Kinh Do on Tuesday jumped 4.6 percent to close at VND56,500 on the Ho Chi Minh Stock Exchange, the highest since September 26. The benchmark VN -Index rose 0.60 percent to 494.17.
Bibica, Vietnam’s second-largest confectionary maker, remained unchanged at VND38,700 on the Ho Chi Minh Stock Exchange Tuesday. The HCMC-based company has almost tripled from VND14,200 on December 31. North Kinh Do, 5 percent owned by Citigroup Inc., has increased 73 percent so far this year, and closed at VND44,300 Tuesday. The companies will gain about 30 percent by end-September, Quang said.
‘Important period’
“The Mid-Autumn Festival is always considered a very important period for our company,” Tran Le Nguyen, Kinh Do’s general director, said from HCMC on Monday. “Although the economy is still facing some difficulties, I don’t think the confectionery sector will be affected that much.”
Vietnam’s government has put in place economic stimulus measures including tax exemptions and loan subsidies, which it values at US$8 billion, including tax exemptions and loan subsidies, to stimulate spending and boost economic growth which slowed to 3.9 percent in the first half. Consumer spending increased 21 percent in the first seven months to VND64 billion, according to figures compiled by Bloomberg.
Kinh Do usually gets up to 40 percent of full-year profit from the festival, Nguyen said.
Bibica, and North Kinh Do, based in Hung Yen Province, near Hanoi, said on average about 15 percent of full-year profit is generated from the Mid-Autumn Festival.
“The beneficiaries of this run-up to the Moon Tet would be consumer staples-related companies, ranging from sugar producers to confectionery makers,” Quang at Sacombank Securities said in a research note to investors.
He also recommended Lam Son Sugar Joint-Stock Co., which makes sugar and alcoholic products for industrial and consumer use, and Bourbon Tay Ninh Joint-Stock Co.
thanhnien, bloomberg
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