The company officially changed its name to Masan Group Joint Stock Company the English name is Masan Group Corporation in August 2009 and was successfully listed on the Ho Chi Minh City
INTRODUCTION
Introduct to Masan Group
Masan Group Joint Stock Company was established in November 2004 under the name Masan Maritime Joint Stock Company The company officially changed its name to Masan Group Joint Stock Company (the English name is Masan Group Corporation) in August 2009 and was successfully listed on the Ho Chi Minh City Stock Exchange Ho Chi Minh City on November 5, 2009 The company also officially changed its name to Masan Group Joint Stock Company in July 2015 Although the company was officially established in 2004, it had already been established and operated Masan Group has been operating since 1996 Along with Vietnam's economic growth, consumers and their needs are constantly developing In addition to basic daily necessities, consumers also need to be served a variety of products and services, outstanding experiences, and products and services tailored to individual preferences and modern lifestyles Technology and convenience are increasingly becoming top concerns and are favored by many people Foreseeing this trend, in addition to the production and business of branded products, Masan Group has built an integrated technology-consumer ecosystem from offline to online
Aiming to become the largest private enterprise in Vietnam in terms of scale, profitability, and shareholder return To that end, MSN combines organic growth and investment in select M&A deals MSN investors are all reputable corporations that support MSN Group financially, strategically, and technically Some typical shareholders who are also subsidiaries of Masan are:
+ PENM Partners (a shareholder of MSN, holding 6% of the company) was established in
2006 Previously, this fund belonged to BankInvest Group Currently, the fund operates three PENM funds with total assets of $400 million, including the PENM fund in Vietnam + Dragon Capital (a MSN shareholder, holding 4%) was established in 1994 The fund currently manages $1.3 billion in assets owned by individuals and organizations around the world
+ KKR (MSC shareholder, holding 18%): The Kohlberg Kravis Roberts (KKR) fund has been established since 1976, investing in diversified assets in North America, Europe, the Middle East, and Asia KKR invested $159 million in Masan Consumer Corporation (MSC) in April
2011 and another $200 million in January 2013
+ Mount Kellett (MSR shareholder, holding 20%) currently manages $4.1 billion in assets
In 2010, Mount Kellett invested $100 million to own 20% of Masan Resources (MSR)
3 The proprty structure: a THE CROWNX
- The CrownX is a retail consumer platform that merges Masan s interests in ’ MCH and VCM The CrownX is set up to realize the vision of becoming an integrated Point of Life from online to offline to serve the diverse needs of “ ” products and services for Vietnamese consumers b MASAN MEATLIFE
- Masan MEATLife is Vietnam s largest player in the branded meat value chain ’(applying the 3F model from farm to fork ), focusing on improving “ ” productivity in Vietnam s animal protein industry with The ultimate goal is to ’ provide consumers with meat products of clear origin, good quality, and reasonable prices This is an industry with a market value of 10.2 billion USD c MASAN HIGH-TECH MATERIALS
- Masan High-Tech Materials (formerly known as Masan Resources) is one of the largest private mineral processing and resource companies in Vietnam’s private sector, currently operating the Nui polymetallic mine project World- class cannon in the north Masan High-Tech Materials is also a globally influential fluorite and bismuth manufacturer Masan High-Tech Materials ’ goal is to show the world that a Vietnamese company can also lead change in the global tungsten market and explore strategic opportunities to become a processing business Tungsten products have a global scale This allows MHT to achieve strong and stable finances across commodity cycles d TECHCOMBANK
- Techcombank is currently one of the largest commercial joint-stock banks in Vietnam in terms of operating income, total assets, credit, deposits, number of customers, and a network of branches and transaction offices With a strategy of putting consumers at the center of the product ecosystem Techcombank has built an industry-leading business network in personal deposits and credit for individuals and small and medium-sized enterprises e MASAN CONSUMER HOLDINGS
- Masan Consumer Holdings was established as the main platform for the group to further invest in food and beverage and other related industries Key players in MCH s portfolio include Masan Consumer and Masan ’ Brewery.Masan Consumer Holdings is one of the largest domestic FMCG companies in Vietnam The company manufactures and distributes a wide range of food and beverage products, including soy sauce, fish sauce, dipping sauce, chili sauce, instant noodles, instant porridge, instant coffee, instant cereals, food-bottled drinks, and beer The company has developed its product portfolio, sales team, and domestic distribution channels to establish a leading position in the Vietnamese branded food and beverage product market Masan Consumer Holdings key brands include Chin-Su, Nam Ngu, Tam Thai Tu, ’ Omachi, Kokomi, Lovemi, Komi, Boo Boo, Ponnie, Vinacafé, Wake-up 247, Compact, Vinh Hao, Quang Hanh, Vivant, Faith, Red Ruby, and White Lion With the completion of the public offer to buy Net Detergent Joint Stock Company, Masan Consumer has officially entered the household and personal care products category f VCM/ WINCOMMERCE
- WinCommerce (formerly known as VinCommerce) is the modern retail platform with the largest coverage in Vietnam, with more than 122 WinMart supermarkets and 2,619 WinMart+ retail stores by the end of 2021 Its subsidiary, WinEco (formerly VinEco), owns a 14-farm system of high-tech agricultural production farms that produce products of international quality.
ANALYSIS OF MASAN FINANCIAL STATEMENTS (Currency par value in VND)
FINANCIAL CAPACITY ANALYSIS
- As of the end of the fourth quarter of 2021, MSN's short-term assets were enough to cover short-term debts with a short-term debt solvency ratio of 1.26 showing high solvency and no risk factor However, considering the short-term solvency ratio (0.03) and the immediate solvency ratio (0.89), MSN's ability to convert assets into cash to cover liabilities is similar relatively low, indicating extremely risky liquidity However, it is extremely positive when In the first quarter of 2021, MSN achieved VND 64,801 billion in net revenue, fulfilling 70% of the low net revenue target for 2021 of VND 92,000 billion Net profit reached 2,126 billion dong, fulfilling 85% of the low target of 2,500 billion dong Both are above 50% of average target result
- Analysis of production and business efficiency is a content in corporate financial management Vietnamese companies are now autonomous business units, self- responsible for their production and business activities
- In the context of the modern economy, companies face many complex problems such as the constant volatility of the market, the fierce competition between domestic and foreign companies Therefore, the analysis of production and business efficiency in order to assess the financial status of the company so as to make appropriate decisions becomes one of the vital issues for the company
- Masan Group Joint Stock Company, although its business is still profitable, is still limited in some production and business activities in recent times, causing a significant decrease in profit, I think the company needs to pay more attention to The analysis of production and business efficiency and the use and application of the above recommendations are completely feasible for the company in order to improve financial analysis, thereby improving operational efficiency financial performance and business performance of the company
- In 2021, Masan's consolidated net revenue reached VND 88,629 billion, up 14.8% compared to VND 77,218 billion in 2020 Net revenue of Q4/2021 reached VND 23,828 billion, up 10.3% YoY Excluding the revenue of the animal feed segment in December 2020 on a comparable basis, net revenue in the fiscal year 2021 and Q4/2021 grew by 16.6% and 17% respectively Specifically, the group reached VND 88,629 billion, up 14.8% from 77,218 billion in 2020 The growth driver mainly came from The CrownX (TCX) consumer and retail platform, with net revenue of more than 58,000 Billion
- EBITDA: Consolidated EBITDA for the fiscal year 2021 reached VND 16,361 billion, up 58.1% YoY while EBITDA margin reached 18.5% compared to 13.4% in 2020
Growth engine mainly comes from EBITDA The CrownX grows 72.9% YoY: Masan's strong profit growth momentum, reflected in EBITDA margin of 21.1% in Q4/2021,
- Net profit after tax allocated to Shareholders of the Company (NPAT Post-MI) in
2021 increased by 593.9%, reaching VND 8,563 billion compared to VND 1,234 billion in 2020
- Return on assets and equity is higher than ROA: as Masan improves profitability across all business segments, especially The CrownX, return on assets and capital
- Owners of the Company increased by 704 and 3,096 basis points to 8.4% and 35.1%, respectively a Effect of total asset utilization (10.45) 2.01:
+ Effect of total assets/equity (2,17 %) Delta ROE (20.23%) 44.93: Source: Figures are calculated from Masan Group ROE financial statements of the company in recent time this is always at a high level, averaging over 18.2%
+ However, the analysis according to the Dupont model shows that there is a change in the 3 components of ROE and reached the highest level in 2010 with 1 dong of equity generating 24.75 dong of profit, and then tends to decrease over the years, this is due to the influence of 3 factors in the Dupont model, namely: First of all, the effect of the profitability ratio on sales on ROE, which can be found that ROS tends to increase and reaches 9.66% in 2021, which has the effect of reducing the return on equity (ROR) by 9.31%, or a dollar of equity in 2020 has generated more profit dong compared to 2020 Theoretically, when the profitability of equity decreases, the reputation of the business will decrease
➔ The influence of the enterprise's ability to manage assets on the efficiency of using equity b Effective use of loan capital:
- We know that the financial debt burdens a company faces depends to a large extent on its ability to generate cash flow to repay its debt on an annual basis Interest is a financial obligation and is guaranteed to be paid from pre- tax and interest income
- Working capital affects the company's operations
- Regarding Masan's working capital at the beginning of January 1, 2021, there was a negative working capital situation, showing that Masan's current assets are lower than short-term liabilities This shows that despite converting all short-term assets into cash, Masan still has many risks when it cannot meet the group's obligations This is extremely dangerous for Masan even if the business has good revenue and profit
- And Masan's working capital as of December 31, 2021 is positive working capital, under normal conditions, Masan can easily convert this sho -term rt asset into cash or pay off due debts At the same time, when working capital is positive, it will help the company's production activities take place normally
- It shows that Masan is making positive moves in improving working capital in Q4 compared to early 2021
RISK OF MASAN ANALYSIS
MARKET RISK
- By the end of 2021, the proportion of revenue comes from mining (14.7%)
In the previous years, revenue from the consumer goods segment accounted for a relatively high proportion (45% - 50%), but in 2020 there has been a shift with the appearance of WinComerce (WCM)
- Regarding the financial situation at MASAN, as of December 31, 2021, equity was recorded at nearly VND 85 billion; total assets increased sharply to more than 51 billion dongs, a difference of 44%, but liabilities at MSN recorded more than 27 billion dongs, down slightly from the beginning of the year, accounting for 54% of total assets Which, short-term debt was recorded at more than VND -55525 billion, larger than equity
- Notably, MSN has a debt- -equity ratio of nearly 1.2 times In addition, to short-term debt at MSN is nearly 1.5 times higher than current assets This shows that the enterprise uses high debt leverage
- A debt- -equity (D/E) ratio greater than 1 means that a business's assets are to financed primarily by debt That is, debt accounts for a high percentage of total assets or total capital, and businesses face many difficulties in finance and must pay debts In fact, businesses accept to use of high leverage in exchange for disproportionate profits in the context of difficult business lines due to Covid-19, not anticipating the risk of decline but at the risk of dangerous trade-offs liquidity and short-term financial investment
- Short-term assets are the capital that businesses often have to spend to purchase and maintain equipment, machine Along with that is the purchase of raw materials and goods for the purpose of using for the business of the enterprise Therefore, short-term assets can be considered a prerequisite b Risks of commodity price fluctuations, affecting MHT's business results:
➔ The situation in the world economic context is very volatile, in the country, there are also many unpredictable risk events that increase Short-term market risks increase from Masan meat life and Masan high-tech For the two pork and mineral metal markets of the two companies, it depends a lot on market and macro factors and especially the "neighbor" of China One country has a great influence on these two markets, especially Tungsten (Tungsten) where reserves and production - account for 70-80% of the world's market share
- Unprocessed raw tungsten mineral, the source material to produce safe and fast rechargeable batteries
- The Chinese market, as is known, is a market with a lack of information transparency, with unpredictable policy risks Until now, the draconian Covid control situation in the country has made these types of volatile capital markets even more difficult to predict
➔The risk for Masan is that if negative developments from these two markets at the same time, combined with the general difficulties of the capital market, it may expose Masan to short-term cash flow risk of all processes production and business of an enterprise c Dividend Distribution Policy:
- On January 6, 2020: (28.54%) 46,190/share, by the end of December 28,
2020 reached 72,700/share, equivalent to 13%, the proportion of shares increased continuously
- We are optimistic about MSN's ability to continue capturing Vietnam's long- term consumption growth as the group owns leading large-scale consumer businesses, branded meats, and retail staples
- Previously, Credit Suisse's report on August 10 had forecast MSN stock at VND162,000, based on third-quarter business results and profit margin with the prospect of increasing in the medium term
- Masan's retail sector grew strongly in July due to high consumer demand Sales per physical store increased 11% month-over-month Credit Suisse, VinCommerce , VinMart and VinMart+, under Masan - better, Phuc Long kiosk model is integrated into VinMart+ thereby improving revenue, profit margin as well as expanding the young customer base The VinMart+ system also aims to expand to 3,001 points of sale by the end of 2021
- It is expected that by the end of the year, Masan will put this model into 1,000 stores,) set a target price of 160,000/share, highlighting Masan's comprehensive improvement in the consumer goods industry
- Updates Masan's management shared a positive view on the business outlook in the third quarter Masan Group's consolidated revenue is expected to grow by 30% y/y thanks to strong growth potential across all business segments
- MCH's sales are expected to increase by 45%, VCM by 15%; MML increased by 50% and MHT increased by 34% => HSC believes that Masan's second half business outlook is more positive than in the first half; The reason is partly due to the changing consumption trends due to Covid-19, on the other hand, the company's products meet modern needs
- The demand for packaged and processed foods increases during the period of social distancing
- The demand for packaged and processed foods increases during the period of social distancing
- According to Kantar Worldpanel, packaged food sales increased 35% in the first two weeks of July as people stocked up on food when shops were closed Masan's processed meat products and instant noodles are consumed more
➔In the past, Masan has drastically implemented solutions to prevent Covid-19 and proactively proposed solutions to both strengthen anti-epidemic and maintain production Masaan's representative proposed to the Prime Minister and local leaders to allow the establishment of a "buffer zone" around the factory This buffer zone can be a school, a vocational training center, a warehouse, a stadium, or a gymnasium Here, workers can both eat and rest, distance themselves, and will comply with epidemic prevention regulations
SWOT ANALYSIS
Strength
+ Masan Group (HOSE: MSN) announced consolidated net revenue in 2021 of VND 88,629 billion, up 14.8% thanks to strong growth in most business segments Particularly in the fourth quarter, revenue reached 23,828 billion dong, up 10.3% over the same period last year
+ Integrated retail consumer platform WinCommerce and Masan Consumer Holdings (UPCOM: MCH), contributing VND 58,000 billion, up 7%
+ Masan Consumer Holdings' net revenue in 2021 reached VND 28,764 billion, up 20%; the fourth quarter recorded VND 10,070 billion, up 32.3% +Masan MEATLife (UPCoM: MML) increased revenue 17.2% to VND 19,900 billion and revenue of Masan High-Tech Materials (UPCoM: MSR) reached VND 13,564 billion, up 86%
+ Profit before tax, interest and depreciation (EBITDA) last year was recorded at 16,280 billion VND, up 58% compared to 2020 (In which, WinCommerce reached 1,000 billion VND EBITDA instead of 1,234 billion VND loss as the previous year .)
+EBITDA of Masan Consumer Holdings increased by 19% to VND6,845 billion
+Masan High-Tech Materials increased by 111.5% to VND3,032 billion
+ Accordingly, profit after tax allocated to shareholders of Masan Group reached VND 8,561 billion, up 594% This is the group's record profit
+ 9 months of 2021, the group recorded a net profit of 2,126 billion dongs, 2.2 times higher than the same period last year Thus, in the fourth quarter of
2021, Masan Group made a sudden profit of VND 6,435 billion, many times higher than the figure of 265 billion in the fourth quarter of 2020
+De Heus Vietnam has taken over 100% of the animal feed business from Masan MEATLife a subsidiary of Masan Group since November 2021 and – invested US$600-700 million in the animal protein supply chain in Vietnam
- Much of the financial situation is affected by the Covid-19 pandemic:
+WCM alone achieved net revenue of VND 30,900 billion in 2021, down a 0.3% compared to last year although the number of points of sale decreased after the process of streamlining the network in 2020 The number of points of sale from the beginning of 2021 is less than 668 locations point compared to early 2020 In 2021, revenue/m2 on a Like-for-Like ("LFL") basis of mini- marts (opened before 2020) increases by 15%, while that of the supermarket market decreased by 10.6% over the same period Partly because the Covid-
19 pandemic has negatively affected Masan's system expansion, the launch of new innovations, and the supply/production chain
+ WinMart's net revenue in 2021 reached VND 9,924 billion, down 6.6% Net sales in the fourth quarter of 2021 decreased by 17.7%, mainly due to the impact of the COVID epidemic causing consumers to increase their inventory in the third quarter of 2021
+ Masan MEATLife decreased by 3% due to low profit margin of animal feed segment (the company sold this segment at the end of November 2021).
Weaknesses
- Much of the financial situation is affected by the Covid-19 pandemic: + WCM alone achieve d net revenue of VND 30,900 billion in 2021, down a 0.3% compared to last year although the number of points of sale decreased after the process of streamlining the network in 2020 The number of points of sale from the beginning of 2021 is less than 668 locations point compared to early 2020 In 2021, revenue/m2 on a Like-for-Like ("LFL") basis of mini- marts (opened before 2020) increases by 15%, while the supermarket market decreased by 10.6% over the same period Partly because the Covid-
19 pandemic has negatively affected Masan's system expansion the launch of , new innovations, and supply/production chain
+ WinMart's net revenue in 2021 reached VND 9,924 billion, down 6.6% Net sales in the fourth quarter of 2021 decreased by 17.7%, mainly due to the impact of the COVID epidemic causing consumers to increase their inventory in the third quarter of 2021
+ Masan MEATLife decreased by 3% due to low-profit margins other animal feed segments (the company sold this segment at the end of November 2021).
Opportunity
- Masan is diversifying its investment areas Currently, MSN has decided to maintain direct and indirect ownership at The CrownX Joint Stock Company, in cooperation with TPG, ADIA and SeaTown to announce a capital of 350 billion VND Aiming to increase market share and value in the consumer sector in Vietnam by the end of 2021
- Net revenue is expected to reach VND 34 trillion VND 40 trillion, up 18 – – 39% compared to 2021 The growth driver comes from the luxury strategy, growth in core products, and development innovation, along with increased accessibility to customers through the WCM chain and other modern commercial retailers
- Phuc Long: It is expected that in fiscal year 2022, Phuc Long's revenue will reach from VND 2.5 thousand to VND 3 trillion, thanks to the expansion of the network of private stores and kiosks in WCM as well as the diversification of the portfolio tea and coffee products
- Mobicast/Reddi: In 2022, Reddi aims to attract 500,000 - 1,000,000 subscribers.
Threats
- After the transaction, worth $ 8.2 billion, up 12% from the previous price The company must promote capital mobilization for investment along with growth promotion and share repurchases to increase the ownership ratio
- The situation of exchange rate and interest rates are not stable, making input material prices high
- When Decree 65 was issued, many businesses faced the risk of not being able to issue bonds to manage cash flow, in addition, the stock market was moving negatively, and it was more difficult for issuers to mobilize capital Although Masan is not affected too much because Masan is not subject to credit squeeze and has the ability to find other alternative capital mobilization channels, Masan may still be affected by general impacts such as psychology in the market, they will face adverse conditions or difficulties when raising capital at high costs
- In contrast to Masan, the issue of Decree 65 has a very negative impact on techcombank, because techcombank is the leading bank in corporate bond
POLICY FOR SHAREHOLDERS
Shareholder Rights
a Rights of shareholders of the company:
- Attend and speak at the General Meeting of Shareholders and exercise the right to vote directly or through an authorized representative with the number of voting shares corresponding to the number of common shares held by the Shareholders
- Receive dividends at the rate of dividend payment decided by the General Meeting of Shareholders
- Freely transfer shares that have been paid in full to other Shareholders and to non-shareholders in accordance with the law
- To be given priority to buy additional issued shares to be offered for sale in proportion to the percentage of common shares currently owned in the Company at the time of offering
- Review, lookup and extract information in the list of shareholders entitled to attend the meeting and request correction of incorrect information Besides, you can copy the company's charter, the book of minutes of the General Meeting of Shareholders, and the resolutions of the General Meeting of Shareholders
- In case the company terminates its operation, and after the company has paid all its debts and obligations, is entitled to receive the remaining assets of the company in proportion to the proportion of shares owned by it b For shareholders or groups of shareholders:
- Owning more than 10% of the total number of ordinary shares of the company for a consecutive period of 6 months:
- Nominate or nominate members of the Board of Directors and Supervisory Board
- Request to convene the General Meeting of Shareholders in the following cases:
+ The Board of Directors seriously violated shareholders' rights
-The term of the Board of Directors has expired for more than 6 months but has not yet elected a new Board of Directors to replace
+ Reviewing and extracting minutes and resolutions of the Board of Directors, mid-year and annual financial statements according to the form of the Vietnamese accounting system and reports of the Supervisory Board
+ Request the Supervisory Board to examine each specific issue related to the management and operation of the company when deemed necessary
From 2019 to 2021, Masan Group pays dividends by main methods: 2
+ June 25, 2019: Issued to employees 5,796,899 VND
-In 2020 MSN will release 2 batches
+ August 19, 2020: Issued to employees 5,736,799 VND
- In 2021 MSN will release 3 batches
+ June 8, 2021: Issued to employees 5,851,446 VND
- In 2021 MSN will release 3 batches
+ June 8, 2022: Issued to employees 7,083,207 VND
-As of December 5, the closing stock price was 104,400/stock Meanwhile, MSN's share price is only 10,000/stock In general, ESOPs can purchase MSN shares for ten times the market price a So, can ESOPs buy stocks as a bargain?
For existing shareholders, even if the shares are issued at a low price, they will be diluted after completion, so whether they will benefit or not completely depends on the market's future expectations for the business Specific examples
- In March and April 2017, Bien Hoa Sugar Joint Stock Company (HOSE: BHS) offered 129.5 million shares to existing shareholders at the price of 10,000 VND/stock At that time, the market transaction price of BHS was only slightly higher than the asking price, around 11,000 VND/stock, but it attracted 97.6% of existing shareholders to buy, 126.4 million stock After nearly 2 months of completing the issuance, BHS has officially put into trading on the market At this time, the price of BHS before the news of merging into Thanh Thanh Cong Tay Ninh Sugar Joint Stock Company (HOSE: SBT) increased in a single circuit from 11,000 VND/stock to over 20,000 VND/stock Thus, if a shareholder takes a profit as soon as the goods arrive in his account, he has achieved a profit of up to 100%
- Another example is Thanh Thanh Cong Tourism JSC (HOSE: VNG) February and March 2017 offered 62.2 million stock to the public at 10,000 VND/stock
In this issuance, existing shareholders bought 88.78% and the rest was distributed to other entities even though the price of VNG at that time was equivalent to par value On June 26, 55.2 million stock bought by existing shareholders were officially traded on the market, the current price of shares is around 15,000 VND/stock Thus, if the investor now makes a profit-taking sale, the rate of return is 50%
-However, on the other hand, cases like BHS, VNG have brought investors a desirable profit after only 2 or 3 months, sometimes investors are disillusioned One or two years ago, many enterprises such as An Duong Thao Dien Real Estate Investment and Trading JSC (HOSE: HAR), Can Tho Agricultural Engineering Materials JSC (HOSE: TSC) or Duc Long Gia Lai Group JSC (HOSE: DLG)… made a huge capital increase by issuing to existing shareholders at the price of 10,000 VND/stock and then the shares gradually fell below par value, causing any shareholder who believes in losing money to suffer serious losses
IX 1 The potential of Masan Group: a Consumer - retail segment:
+MCH (Masan Consumer Holdings) benefits from increased home consumption demand for convenience foods, condiments, and processed meats in the consumer retail segment MCH is expected to be the main growth driver of MSN in 2022, with a growth rate of more than 20% due to new innovations and a premium portfolio strategy
+VinCommerce (WinComerce): Immediately following the M&A and takeover of Vinmart, the company restructured, closed inefficient stores, initially reduced selling costs, and EBITDA showed signs of increasing growth and value for three consecutive quarters Furthermore, MSN expanded the role of Winmart bananas in its general business activities by integrating TCB banking services or Phuc Long, increasing the average number of invoices/day and revenue by 16% Profit per order increased as well
+In addition, Masan has added a new puzzle piece to the Point of Life ("PoL") consumer ecosystem (an offline- -online integration platform for essential to products and services) with the acquisition of Co Mobicast Joint Stock Company, a startup in the field of virtual mobile network Expansion into the telecommunications sector is said to be the basis for Masan to digitize its current platform mainly in offline channels, build loyalty programs to bring value to consumers in the long-term, and at the same time reduce the cost of attracting new customers In 2022, it is expected that after the epidemic is completely controlled, the new model stores (PoL) of the WCM retail chain can be deployed on a large scale, which will be the driving force for revenue growth in 2022
- For MML (Masan Meat Life): Masan aims to increase the capacity of meat processing plants to 25%-30% in Q4/2021 from 11% currently It is estimated that sales from chilled meat will reach ~ 220 million USD in 2021 Besides, the animal feed segment will grow again thanks to the steady process of re-herding MML can achieve ~30% revenue in 2022 thanks to the deeper market penetration of the chilled meat segment b Mining and mineral processing segment:
Masan Resources Company owns the Nui Phao polymetallic mine with the largest tungsten reserve in the world Tungsten ore has been in an uptrend since 2018 so the potential of this segment is expected to still be high
CONCLUSION
Masan-VinEcommerce deal
a WHY DID VINGROUP CHOOSE MASAN TO TRANSFER VCM?
On December 3, 2019, Masan and Vingroup announced the swap deal between VCM Service and Trading Development Joint Stock Company (VCM), the owner of Vincommerce and VinEco, and Masan-owned company Masan Consumer Holding (MCH) To carry out this merger, Masan established Crown X to own the capital of VCM and MCH, in which Masan will own 70% of Crown X shares through The Sherpa company and issue 30% options to That seller is Vingroup
Ownership structure after the merger between VCM and MCH (Source: Cafef)
Vingroup's transfer of capital contribution to VCM is considered to prepare for a capital call for the retail segment in September 2019 when Singapore's GIC fund announced an investment of 500 million USD in VCM to own 16.26% of the shares Although the department is one of the largest retail systems in Vietnam as of 9M/2019 with a revenue of more than 23,571 billion VND, Vincommerce still has to record a pre-tax loss of 3,461 billion dong From 2015 to 9M/2019, Vincommerce recorded a total loss of more than 17,634 billion VND
(Source: Vingroup Financial Statements, Unit: Billion VND)
- In addition to the retail segment, which is having to record losses over the years, the manufacturing segment (cars and phones) is also being strongly invested by this group and recorded a loss of 9,913 billion dongs in 2019
During the year In 2020, the manufacturing segment brought in revenue of VND 17,599 billion, but COGS was reported at VND 25,110 billion, corresponding to a loss of gross profit of VND 7,511 billion According to the plan revealed by billionaire Pham Nhat Vuong to Bloomberg, Vinfast is expected to break even by 2025 and the loss may be up to 18,000 billion VND/per year
- The reason for selling Vincommerce given by Vingroup is so that the company can free up concentrated resources for the group's industrial and technology segments soon
- Besides Masan there are many potential financial units, but Vingroup did not choose Firstly, Vingroup never sells Vietnamese brands, but specifically, the Vinmart + chain to foreign countries Secondly, from a business perspective, it is never possible for Vingroup to sell off a well-developed retail chain, with the goal of becoming the group's second spearhead business - for any business Therefore, Masan Group is the right factor for this deal, with annual revenue of up to VND 37,354 billion VND in 2019 and is one of the leading consumer goods manufacturers in Vietnam Masan is known for many acquisitions with great value, such as the acquisition of Nui Phao project with a total investment of more than 1 billion USD In addition, Masan also purchased a 75.2% stake in Vietnam - France Joint Stock Company for Animal Feed Production (“Proconco”) with a deal value of more than US$200 million
Financial indicators of Masan and MWG in 2019 (Source: Financial Statements) b What potential does Masan's acquisition of Vinmart have?
- Masan's merger of two subsidiaries VinCommerce and VinEco of Vingroup takes place in the context that VinCommerce owns 2,600 VinMart supermarkets and VinMart + convenience stores, which is quite a virtual pressure compared to domestic and foreign competitors
- When taken over by a leading enterprise producing FMCG like Masan, Masan's sources of goods such as soy sauce, fish sauce, and instant noodles when sold in the Vinmart distribution system will raise the cut costs during the intermediate distribution as before From there, it can help reduce the selling price to users, creating more competitive advantages in price
- Despite many challenges, in general, the handshake between the two big manufacturers and retailers will positively affect the competitive advantage of domestic enterprises in the retail market, especially after only 5 years, businesses selling to Foreign retailers will no longer be subject to economic needs test (ENT) that limits their ability to expand their coverage, as committed when Vietnam signed the CPTPP (Comprehensive and Progressive Agreement for trans-Pacific) This means that the domestic-foreign competition in this market will be fairer and fiercer
Based on the potential and analysis of Masan's financial statements, this is a company with healthy and stable financial resources So, for investors, this is also a company worth investing in Here are the reasons to prove Masan Group is a company worth investing in
Based on the potential and analysis of Masan's financial statements, this is a company with healthy and stable financial resources So for investors, this is also a company worth investing in Here are the reasons to prove Masan Group is a company worth investing in a Ability to generate sustainable cash flow
- In the past 3 years, the business market in Vietnam and the world is facing many difficulties because of inflation, so the bank has switched from loosening policy to tightening monetary policy to control inflation and stabilize socio-economic environment Meanwhile, Masan Group - a business operating in the retail consumer segment with great potential, is less dependent on the market cycle and has the ability to operate, thereby generating sustainable and steady growth of cash flow
- In M&A activities, Masan Group is a notable name with many deals: SK Group (Korea) bought 16.26% of Masan at VinCommerce (renamed WinCommerce) for $ 410 million, The Sherpa (Masan’s subsidiary) bought 85% shares of Phuc Long and spent $65 million to buy 25% of shares of Trusting Social… With the purchase of Phuc Long, Masan was divided into 3 purchases, the last purchase, Masan bought 10.8 million shares, equivalent to 34% of the share capital of Phuc Long Heritage JSC with a total payment of VND3,618 billion
So, the valuation for Phuc Long continues to be raised to 10,640 billion VND (about 450 million USD)
+ The cash flow generated by the business and loans from domestic and international financial institutions are put into operation by Masan for the right purposes and profitably In the first 9 months of 2022, the profit of Masan's main business segments reached VND 2,105 billion, up 40% compared to the same period in 2021 b Corporate management capacity
+ In the retail segment, Masan has improved WinCommerce chain profitability, not only in terms of store model but also in expanding scale, renewing product portfolio, and negotiating with suppliers to offer good prices for consumers
+ In 2020, WinCommerce still has a loss of approximately VND 1,700 billion/year, by the end of 2021, this company has made a profit of more than VND 1,100 billion EBITDA (profit before tax and before amortization), a change of nearly 3,000 billion in just 2 years By the end of the third quarter of 2022, Masan held 50% of the market share of modern retail stores (mini supermarkets, convenience stores) nationwide