Vietnamese goods account for over 90% at WinMart (1).jpg

Raising $5 billion in investment capital

Mr. Michael Hung Nguyen - Deputy General Director of Masan Group assessed that Masan (HoSE: MSN) is a company that is quite "diligent" in implementing M&A deals.

In its history of operation, Masan has continuously added pieces to the puzzle with a series of different M&A deals, such as: penetrating and holding more than 98% of Vinacafé Bien Hoa (VCF); buying control of NET detergent, Quang Ninh Mineral Water, Saigon Nutrition Food Company; buying Sam Kim Company Limited, changing its name to Masan Nutri-Science and then changing to Masan MEATLife (MML)... Or recently, the deals to buy controlling shares of the Phuc Long tea and coffee chain, the MVNO network company Mobicast... In which, the most "famous" M&A deal of Masan must include the decision to merge VinCommerce (currently WinCommerce) in 2019 to penetrate the retail sector.

“Is Masan investing too widely and how is Masan defining itself?”. In response to this question, the Deputy General Director of Masan Group said: “Investors see the company selling fish sauce, soy sauce, coffee, meat, etc., and think that Masan is doing too much. But when looking closely at Masan’s portfolio, we can see that the group is focusing on serving essential needs.”

From a consumer goods company, where FMCG products were once considered “golden goose”, Masan has transformed into a platform that “connects thousands of needs”, serving daily essential needs and accounting for 80% of Vietnamese consumer spending.

Consumers shopping for Masan products.jpg

Masan Group's board of directors previously said that when buying shares in other companies, whether at the strategic level or controlling stakes, the group always determined not to buy revenue or profit, but to buy a "platform" to serve the overall strategy. The platform here could be good technology, helping to create the best products at reasonable prices to serve consumers. The platform could also be a distribution network that would help Masan further expand its already very good distribution system, or help Masan build and maintain a strong Vietnamese brand.

According to Masan data, over the past 17 years, the group has raised approximately $5 billion in investment capital. This capital is allocated to a portfolio of consumer companies that are increasingly expanding and perfecting the above-mentioned consumer production supply chain, aiming for strategic growth.

“Investors such as KKR, TPG, SK Group… all invest more than once. The common point of these investors is that they all aim for long-term cooperation,” said Mr. Michael.

Positive signals from the consumer - retail platform

Consumer goods (Masan Consumer) and retail (WinCommerce - the operator of the WinMart supermarket chain and WinMart+ and WiN stores) are currently the two core business segments, accounting for 80% of Masan Group's revenue and profit.

At the time of acquisition by Masan Group, WinCommerce's EBITDA was negative 7% and is now positive 4%, an improvement of 11% over 4 years. WinCommerce has also recorded consecutive positive net profits in June, July, and August 2024. Currently, this retailer has nearly 3,700 points of sale nationwide with diverse store models serving consumers from urban to rural areas.

According to the Deputy General Director of Masan Group, the company's next focus is to continue to focus on its core retail consumer business. This includes an IPO for Masan Consumer (a branded consumer goods subsidiary of Masan Group) in 2025, while strengthening the Go Global strategy, promoting Vietnamese flavors to global consumers. For the WinCommerce retail segment, Masan continues to optimize profits, improve operations, develop the WiN Membership program and personalized promotions.

In addition, to increasingly focus on the consumer retail business, Masan is also working with strategic investors to reduce interests in non-core businesses. Strategic activities to reduce financial leverage and improve the balance sheet will continue to be implemented by Masan throughout the coming time.

Masan Group's first-half business results report shows that the group recorded VND1,425 billion in after-tax profit before allocation to minority shareholders and VND607 billion in after-tax profit after allocation to minority shareholders. Thus, in the first half of 2024, Masan has achieved more than 60% of the annual profit plan according to the base scenario approved by shareholders at the beginning of the year. With positive results in the core consumer - retail business segment and the market recovery, Masan expects to complete the profit plan, continuing to create outstanding value for the company's shareholders.

Vinh Phu