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VNM - Domestic volume growth & lower input costs fuel a strong FY16 - Earnings Flash

VNM released its FY16 results with net revenues +16.8% and NPAT +20.3% vs FY15, which are broadly consistent with the previous guidance of a slowdown in Q4 2016 vs 9M 2016. From our discussion with VNM, we understand that VNM intended to smooth out FY17 earnings growth amid the rebound in input milk powder prices via a proactive recognition of heavy selling expenses in Q4 2016. Given that, we are not concerned about VNM's underlying business despite the underperformance of FY16 NPAT