According to data from the IMF, with a population of nearly 100 million, half of whom are under 32 years old, our country has achieved impressive GDP per capita growth with a CAGR of 7.1% since 2017, reaching more than 4,000 USD by 2022 - the highest among ASEAN/EM countries.
With the workforce gradually shifting to higher value-added industries, a large proportion of consumers in Vietnam will join the middle class in the next few years. Vietnam has been witnessing a golden period of consumption growth as well as consumer stocks. Among them, Masan Group's MSN stock will have many growth drivers thanks to the company's leading position in the consumer retail industry.
Recently, according to an update from the General Statistics Office (GSO), the total retail sales of goods and consumer services revenue at current prices in May 2024 is estimated at VND 519.8 trillion, up 9.5% over the same period last year. In the first five months of 2024, the total retail sales of goods and consumer services revenue at current prices is estimated at VND 2,580.2 trillion, up 8.7% over the same period last year.
In addition, thanks to the effectiveness of favorable visa policies, tourism promotion programs in 2024 have been promoted by localities across the country, attracting a fairly high number of international visitors to Vietnam compared to the same period last year. In May 2024, the number of international visitors to our country reached nearly 1.4 million, an increase of 51.0% over the same period last year. In the first five months of 2024, international visitors to our country reached nearly 7.6 million, an increase of 64.9% over the same period last year and an increase of 3.9% over the same period in 2019 - the year when the Covid-19 pandemic had not yet occurred.
Another equally important parameter that contributes to revealing the picture of economic recovery is the Index of Industrial Production (IIP). Accordingly, according to data from the GSO, industrial production in May continued to maintain a more positive growth trend than the previous month. The IIP in May 2024 is estimated to increase by 3.9% compared to the previous month and by 8.9% compared to the same period last year.
On the morning of June 3, the latest S&P Global Purchasing Managers' Index™ (PMI®) report was released. Accordingly, the Vietnam Manufacturing Purchasing Managers' Index remained unchanged at 50.3 in May. "This result shows that business conditions in the industry have improved slightly for the second consecutive month," the report stated.
The telling figures of production, consumption, and tourists to Vietnam since the beginning of the year partly signal the recovery of the economy in general and consumption in particular, contributing to boosting the business results of retail consumer enterprises. With its leading position in the industry, Masan Group promises to reap positive results this year.
Practical policies to promote consumption
In recent years, the Vietnamese economy has continuously faced many difficulties and challenges, requiring many solutions to stimulate aggregate demand to achieve the set growth target. Accordingly, stimulating domestic consumption is one of the important solutions being implemented by the Government, ministries, sectors, localities and enterprises to maintain growth momentum and promote economic development. In particular, salary reform and VAT reduction are among the recent policies implemented by our state in promoting domestic consumption.
On the morning of May 20, speaking at the opening session of the 7th session of the 15th National Assembly, Deputy Prime Minister Le Minh Khai reported on the additional assessment of the results of socio-economic development and state budget implementation in 2023, and the implementation of the socio-economic development plan and state budget in the first months of 2024.
According to the Deputy Prime Minister, in 2023, despite many difficulties, GDP will increase by 5.05% (previously reported at 5%). The size of the economy will reach 430 billion USD, entering the group of upper middle-income countries. By the end of 2023, about 680,000 billion VND has been set aside to implement the new wage policy.
In addition, to continue to support and accompany people and businesses, the Government has submitted a document to the National Assembly for consideration and permission to continue implementing the policy of reducing VAT rates by 2% for a number of groups of goods and services currently applying a VAT rate of 10% in the last 6 months of 2024.
The above means that our government has been actively implementing fiscal policies to optimize GDP growth, indirectly pumping a large amount of money into the economy through wage reform policies, reducing VAT to stimulate domestic consumption, and retail consumer businesses like Masan Group will benefit significantly from this move.
Recognizing that Masan Group's business segments currently have positive development prospects in the coming time, in the latest update, HSBC international financial group has raised the target price of MSN shares of Masan Group Corporation to VND98,000/share.
Expectations for consumer and retail stocks to “take off”
Expectations of profit recovery in the consumer market and information about Bain Capital's capital flow can 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 at which Bain Capital accepted to invest in Masan, which was 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.
According to the latest report of BIDV Securities (BSC), the analysis team has issued a strong buy recommendation for Masan Group Corporation (MSN) shares with a medium-term target price of VND 100,000/share, with a potential upside of up to 32% compared to the closing price of MSN shares of VND 75,800 on June 11, 2024.
The report stated that in the first quarter, Masan's core business continued to record a 6% year-on-year revenue growth and a 3.1% increase in operating profit margin. Based on data from 2019-2023, BSC found that Masan has built a complete ecosystem in the consumer value chain including MCH, WCM, MML and PHL, recording a compound annual growth rate (CAGR) of 20% from 2019-2023.
In addition, Masan has restructured its business segments to focus on efficiency. This strategy was further affirmed by Masan's board of directors at the 2024 Annual General Meeting of Shareholders: "We will further boost the profitability of WinCommerce, Masan MEATLife and Phuc Long to be on par with Masan Consumer. Profitability will be an important metric in the next 18 to 24 months to help maximize shareholder value.", the report stated.
In a recent report, Vietcap maintained an optimistic view on the prospects of the leading consumer segment with MSN's wide range of operations. Masan will benefit from the consumption growth in Vietnam in the long term. The unit increased its target price and recommended BUY MSN shares with a target price of VND102,800/share.
“We believe that MSN’s diversified consumer business is well-positioned for Vietnam’s consumption growth. We forecast an 18% compound annual growth rate of operating profit (CAGR EBIT) over 2023-28F for MSN’s consumer retail business,” the report stated. In addition, Vietcap analysts also pointed out the reason for their increase in MSN’s stock valuation: “Our higher target price is due to our 17% increase in our valuation for Masan Consumer Holdings Company Limited (MCH Ltd.), mainly due to a 9% increase in total EBIT forecast from 2024F-28F of its subsidiary Masan Consumer (UpCOM: MCH). In addition, we will implement our target price outlook until mid-2025.”
In the latest update, international financial group HSBC also raised the target price of Masan Group's MSN stock to VND98,000/share. At the end of June 11, MSN's market price reached VND75,800/share. Thus, with HSBC's valuation, MSN stock has the prospect of increasing in price by up to 29%.
HSBC believes that Masan Group's business segments currently have positive development prospects. In particular, Masan Consumer is the pillar of Masan Group's consumer business segment, maintaining high profit margins since 2018, with stable revenue growth and significantly surpassing peers in the fast-moving consumer goods (FMCG) and packaged food sectors in Southeast Asia.
Source: https://www.masangroup.com/vi/news/invest-in-vietnam/Decoding-the-potential-of-Masan-Group-share-price-as-a-leading-enterprise-in-the-consumer-industry.html
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