Expectations of profits from the consumer market recovery and information about Bain Capital's upcoming capital injection could help Masan (MSN) stock attract cash flow and reap many positive results.
In November 2023, Masan Group (MSN) shares were at VND54,000, after which the stock began a sideways slide, accumulating the base. By early March, MSN gradually recovered, at times jumping up to VND81,000. The highlight was that in the session on March 5, Masan shares suddenly exploded and became the "locomotive" leading the increase of VN-Index. By April 12, the stock price returned to VND72,000, far from the price that Bain Capital accepted to invest in Masan at VND85,000.
Dragon Viet Securities (VDSC) believes that MSN's recent growth comes from the story of recovering purchasing power, production gradually recovering, low interest rates and support policies from the Government will be significant support to stimulate spending.
The bright spot for MSN is also in the macro conditions of the market. According to the update from the General Statistics Office (GSO), in the first 3 months of the year, trade and service activities were vibrant and maintained a high growth rate compared to the same period last year. In the first quarter, total retail sales of goods and consumer service revenue increased by 8.2% compared to the same period last year. Sectors with the potential for sustainable growth and lower risks such as technology, healthcare, pharmaceuticals, consumer goods, retail, utilities, etc. attracted great attention from foreign and institutional investors. This year, Vietnam aims for economic growth of 6-6.5% with many driving forces from continued FDI attraction, export recovery and growth, and return of consumer confidence.
The outlook for MSN shares also comes from the investment story of Bain Capital - a US private equity fund managing about 180 billion USD. According to Masan, Bain Capital will complete the investment transaction of 250 million USD for the company on April 22. Masan said that the capital of 250 million USD will strengthen resources, help increase liquidity to meet all financial obligations, and at the same time provide the company with flexibility in implementing strategic initiatives.
Commenting on the potential of MSN shares, according to Bao Viet Securities (BVSC), the most difficult period of the group has passed. Profit recovery and gradually decreasing financial costs will be the growth drivers of the shares in the coming time. The analysis unit also emphasized that MSN shares, along with a number of other bluechips, may attract cash flow in the story of upgrading the Vietnamese stock market.
Sharing the same view, BIDV Securities (BSC) forecasts that the core consumer segment including Masan Consumer and WinCommerce (the company operating the WinMart chain) has gradually reached the point of efficiency when the compound annual growth rate (CARG) of earnings before tax and interest (EBIT) in the 2023-2025 period reaches 20.8% compared to only 9% in the 2021-2023 period.
As for Masan, this year the company targets consolidated net revenue of VND84,000-90,000 billion, up 7-15% over the same period in 2023. As for core after-tax profit before allocation to minority shareholders, it is expected to reach VND2,290-4,020 billion, up more than 17% and double compared to 2023, respectively, depending on macroeconomic conditions.
The motivation for businesses to expect growth is due to Masan's pillars such as Masan Consumer Holdings (MCH), WinCommerce (WCM), Masan MEATLife (MML) recording many positive signs.
WinMart supermarket staff are consulting products for customers. Photo: Masan
Last year, MCH's "Go Global" strategy helped export revenue increase to VND1,005 billion in 2023, up 13.6% over the same period in 2022. In the supermarket segment, WinCommerce (WCM)'s growth was driven by network expansion and positive results from new stores. The unit expects to achieve net revenue this year of VND32,500-34,000 billion, up 8% to 13% year-on-year, respectively.
Masan MEATLife (MML) is expected to achieve net revenue of VND7,100-7,800 billion, corresponding to an increase of 2% to 12% over the same period thanks to focusing on investing in the processed meat business and reducing the scale of chicken farms. In the F&B segment, Phuc Long (PLH) aims to bring in VND1,700-2,170 billion, corresponding to a growth of 17% to 41% over the same period.
Masan said it will continue to deleverage to improve its balance sheet, reduce its exposure to non-core businesses while maintaining a tight capital allocation strategy. The company aims to increase liquidity and achieve a sustainable net debt-to-EBITDA ratio of below 3.5 times.
Thai Anh
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