Vietnam's sauces, condiments and spices market is growing strongly, with retail sales reaching VND39.9 trillion in 2023, up 9% compared to 2022, according to Euromonitor.

During the period from 2009 to 2028, the spices segment is expected to grow at a compound annual growth rate (CAGR) of 11% on a current value basis to reach VND65.8 trillion (US$2.6 billion).

According to Euromonitor, Masan Group continues to be a trend setter and maintains its market leadership position with 30% market share thanks to its ownership of major brands as well as new product development. In the fish sauce category, Masan holds 70% market share. In the soy sauce and chili sauce sectors, Masan also holds more than 60% and 50% respectively.

However, there is one business in this field that is breaking out strongly and has great ambition, with a 20-year vision.

Stock with the second highest market value in Vietnam

In recent weeks, investors have witnessed a breakthrough in CMF shares of Cholimex Food Joint Stock Company (Cholimex Food). In the trading session on June 26, CMF suddenly increased by 15%, equivalent to an increase of VND32,900 to VND252,400/share.

This is a rare increase in the absolute value of a stock on the stock exchange.

With a price of VND 252,400, CMF rose to number 3 in market price on the Vietnamese stock market (TTCK), surpassing Ha Long Beer and Beverage Joint Stock Company (UpCOM: HLB).

By July 8, Cholimex Food's CMF stock reached VND262,000/share, surpassing VE4 of VNECO4 Power Construction JSC (HNX).

Thus, CMF currently has the second largest market value in Vietnam, just behind the technology giant VNG Corporation (UpCOM: VNZ) of Mr. Le Hong Minh. VNZ ended the session on July 8 with a market price of VND570,000/share.

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Cholimex Food, Masan Group, and Trung Thanh are the leading chili sauce manufacturers in Vietnam. Photo: Thach Thao

The reason why Cholimex Food's CMF has a very high market price and continues to increase with very low liquidity is because this company has concentrated shares, a total of 8.1 million units and 3 major shareholders holding up to 92.55% of the capital. In addition, CMF has good business operations, revenue and profit increase steadily, and pays high dividends regularly.

Cholimex entered the chili sauce market in the late 80s and currently has main products such as soy sauce, chili sauce, fish sauce... This is one of the leading companies in the industry along with Masan, Trung Thanh, Nosafood... and also distributes to popular channels such as Metro, Co.op Mart, BigC.

What is the outlook?

One of the highlights of Cholimex Food is its leading position in providing spices for major brands such as Haidilao, Pizza Hut, Popeyes, Domino's Pizza, Jollibee... These are fast food restaurant chains from many countries such as the US, China, Philippines...

In terms of shareholder structure, Cho Lon Import-Export and Investment Joint Stock Company (Cholimex) holds 40.72% of Cholimex Food shares, Masan Food Company Limited holds 32.83% and Nichirei Foods Inc holds 19% of shares.

In 2014, the consumer and retail giant Masan of billionaire Nguyen Dang Quang wanted to increase its influence by sending a public offer to buy 49% of Cholimex Food's shares at VND90,000/share. However, major shareholders Cholimex and Nichirei Food have not yet approved. Currently, Masan is still one of the major shareholders of CMF.

In 2023, Cholimex Food recorded 14 consecutive years of revenue growth to VND3,410 billion (up 5.9% compared to 2022) despite the global economic difficulties and low domestic consumption demand. CMF's profits in the past two years have been above VND200 billion/year.

CMF plans to have 3,850 billion VND in revenue in 2024.

In the long term, the company of Chairman Huynh An Trung and General Director Diep Nam Hai has quite big ambitions, with the expectation that revenue will be 5 times higher than the current level in the next 5 years. In the immediate future, CMF aims for a revenue of 10,000 billion VND, with revenue coming from the frozen food line produced by the new factory. This is a new food processing factory project in Vinh Loc 2 Industrial Park (Ben Luc, Long An) with a total investment of 850 billion VND.

In addition, CMF also benefits from the strong development of the spice industry. People now use more convenient spice packages such as sauces and marinades. Enterprises also boost exports to dozens of countries around the world, including Europe, North America, Australia, Korea, etc.

However, Cholimex Food also faces strong competition from big names like Masan Group, Trung Thanh, Nosafood... Recently, Mr. Nguyen Dang Quang's Masan has strongly expanded its market size and enhanced its brand value through the strategy "Go Global - bringing Vietnamese brands to the world". If other businesses in the industry do not accelerate their development, they may fall behind.

Masan Consumer plans to list shares on HOSE Masan Consumer Corporation (Masan Consumer) has just submitted to the 2024 annual general meeting of shareholders approval to list all outstanding shares of the company on the Ho Chi Minh City Stock Exchange (HOSE).