How to pick consumer stocks

However, not all consumer goods stocks will increase in value. As a result, in order to limit  risks, investors must exercise prudence.

Positive Outlook Recently, interest rates have fallen dramatically, with bank deposit interest rates falling drastically. This decrease is projected to continue in the foreseeable future, increasing sales income for some luxury products. For example, retail sales of autos showed indications of improvement in June, despite the fact that the special consumption tax cut of 50% did not apply during that month.

According to a McKinsey analysis, the Vietnamese have one of the greatest rates of income decrease anticipation and saves (over 90%) in Asia. Consumers have expressed anxiety about price rises, inflation, gasoline prices, and rising interest rates. However, polls reveal that even in times of economic uncertainty, Vietnamese consumers remain hopeful. They anticipate the economy will rebound in the next three months and even expand faster than it did before the outbreak.

Experts foresee a major recovery in the consumer goods industry beginning in 2024 and continuing through 2025. During the COVID-19 lockdowns in 2020-2021, as well as the work-from-home and online learning waves, Vietnamese consumers, like those across the world, acquired a large number of computers and cellphones. As a result, sales of these goods fell in 2023, appearing negative when compared to the previous year. This fall, however, has established the basis for individuals to save and offers the necessary circumstances for consumer spending to return in the near future.

Furthermore, vital items such as milk, dairy products, and beer have remained unaffected and are predicted to expand at a steady rate of 4-6% over the next two years.

Phones, electronics, and jewelry, for example, which had a dip in 2023, are predicted to see solid growth and a robust comeback in 2024-2025.

Vietnamese consumers have reduced their spending and boosted their savings over the last year, setting the groundwork for a more comfortable economic future. When the overall economy grows by roughly 6.5% in 2024-2025, consumers are projected to tap into their savings and continue spending on a new cycle.

Stocks that are appealing In terms of the Vietnamese stock market's appeal, HSC feels that the incentive rests in the future expansion of the young population and the expanding middle class. As a result, numerous countries and huge organizations throughout the world are actively increasing their sales in Asian countries.

DGW shares of The Gioi So Joint Stock Company are now attracting interest. June is clearly a month of significant income for DGW and other industry businesses, with the biggest revenue in many years. Quarterly, the second quarter of 2023 showed strong increase compared to the first quarter, and the third quarter is predicted to be much better than the second quarter, as is the fourth quarter.

In terms of the consumer goods industry in the coming years, tremendous growth is projected in the second half of 2024. This is because the laptop and smartphone markets witnessed tremendous growth in late 2021 and early 2022, with consumption increasing by 70-80%.

These items will undergo modification after a 2-3 year cycle owing to wear and tear or the launch of new models. According to HSC, the laptop and smartphone markets, which account for the majority of sales, are predicted to rise significantly in the second half of 2024 and the first half of 2025.

There are also VNM shares of the Vietnam Dairy Products Joint Stock Company. VNM has lately witnessed good conditions as a result of a series of initiatives supporting consumption in the context of an economy that is expected to rebound beginning next year. Furthermore, prices in the raw milk market have decreased.

In addition, the National Assembly passed a resolution to lower the value-added tax by 2% until the end of the year. In terms of macroeconomic conditions, we have witnessed early signals of improvement in export activity, notwithstanding persistent economic problems.

In the worldwide market, the price of raw milk has plummeted by roughly 25% compared to the previous year, reaching its lowest level in four years. Notably, the cost of imported raw milk from China has dropped dramatically. This will assist VNM in drastically lowering its input costs and increasing profitability in the near future.