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VNM - ADD - Strong growth, better gross margins - Update

Comparing 9mo 2013 with 9mo 2012 results, VNM sales grew by 16.8% while net profit rose 21.4%. Gross margins hit a 5-year high at 37.4% thanks to a better product mix (especially powdered milk) and effective input cost management. We continue to like VNM as a long-term investment and believe growth will continue at the same pace over the next 3 years. Currently, VNM is trading at a PER of 17x 2013 and 14x 2014 EPS. We maintain our target price at VND164,000/share. ADD