With strong finances, Masan's shares are of interest to many financial institutions.

With positive business prospects and abundant liquidity from the investment deal with Bain Capital, Mitsubishi Materials Corporation buying 100% of HC Starck Holding, dividends from Techcombank, Masan shares (MSN - HOSE) were upgraded in valuation by domestic and foreign financial institutions, recommending BUY.

Abundant liquidity, strong finance

On May 30, Masan High-Tech Materials (a member company of Masan Group) announced that it had signed a Purchase and Sale Agreement with Mitsubishi Materials Corporation. Accordingly, Mitsubishi Materials Corporation will purchase 100% of HC Starck Holding (Germany) GmbH (“HCS”) from MHT for USD 134.5 million.

The proceeds from the transaction are expected to help reduce MHT's debt and contribute to Masan Group's target of reducing Net Debt to EBITDA to ≤ 3.5x. Masan is expected to record a one-time profit of about USD 40 million and is expected to increase net profit after tax by USD 20-30 million in the long term.

Previously, on April 23, Masan announced that it had successfully completed the mobilization of equity capital worth 250 million USD from Bain Capital - the world's leading private equity fund with total assets under management of approximately 180 billion USD. The mobilized capital was converted at 25,356 VND, equivalent to Masan receiving 6,228 billion VND from this investment (after deducting transaction fees), helping to significantly improve the company's balance sheet.

In addition, on May 2, the Board of Directors of Techcombank (TCB) issued a decision to implement cash dividends and bonus shares. Specifically, the last registration date to exercise the right to receive cash dividends is May 22, 2024. The implementation rate is 15%/share, meaning 1 share receives 1,500 VND. Owning 19.9% ​​of economic interests at TCB, Masan is expected to receive more than 1,000 billion VND in cash in the next 6 months, helping the company to facilitate the work of reducing financial leverage.

The push from the “family heirloom diamond”

In 2024, Masan Group plans to operate with revenue ranging from VND 84,000 billion to VND 90,000 billion, up 7.3% - 15% respectively. Profit after tax is expected to range from VND 2,250 billion to VND 4,020 billion, up 31% - 115% compared to the results achieved in 2023.

In 2024, Masan's leaders said they will focus on developing the "family heirloom diamond" Masan Consumer (MCH), implementing the Go Global strategy to become a culinary ambassador to the world's 8 billion consumers with strong brands. Bringing Vietnamese brands to the world, according to the Group's leaders, Masan Consumer aims for 10-20% of revenue from the global market.

Masan Consumer has successfully built strong brands with annual revenue of 150 million to 250 million USD, contributing to 80% of total revenue growth. This enterprise is confidently planning to go out into the world on the journey of "Vietnamese culinary ambassador": "Every Vietnamese family, every Masan product. Every family in the world, at least one Masan product".

For example, CHIN-SU (a brand of Masan Consumer) became a billion-dollar brand by premiumizing the brand, serving more than 65% of Vietnam's fish sauce consumption. Since 2007, this product has always improved the quality of fish sauce by improving flavor and packaging, while creating more value-added products, the brand has developed into a comprehensive and premium spice category. The initial achievements of the "Go Global" journey - bringing Vietnamese cuisine to the world, targeting 8 billion global consumers, include CHIN-SU reaching the top 1 position on Korea's Coupang e-commerce platform, and the top 10 position on Amazon in 2023.

From 2017 to 2023, Masan Consumer grew at a rate 2.2x the general market rate. According to a recent report by HSBC, Masan Consumer has high profit margins, stable revenue growth and significantly outperformed its peers in the FMCG and packaged food sectors in the region.

In 2023, the company set a new record profit when recording a profit after tax of VND 7,195 billion, an increase of 30% compared to 2022. EPS in 2023 reached VND 9,888/share, a sharp increase compared to EPS in 2022 of VND 7,612/share.

In 2024, Masan Consumer expects net revenue to reach VND32,500 billion to VND36,000 billion. In addition to its core products and businesses, the company is also developing innovative capabilities and processes to complete its FMCG portfolio in the future. With positive growth momentum over the past many years, MCH will make positive contributions to Masan's business results as well as Masan's stock price.

Attractive valuation for medium and long term goals

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 price increase of 29.5% compared to the closing price on May 30, 2024.

The report stated that in the first quarter business results, MSN'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 MSN has developed a complete ecosystem in the consumer value chain, including MCH, WCM, MML and PHL, with a revenue growth rate CAGR of 20%.

In addition, MSN has restructured its business segments to focus on efficiency, reducing quantity and increasing quality, and this strategy was further affirmed by MSN's board of directors at the 2024 Annual General Meeting of Shareholders: "We will further promote the profits of WinCommerce, Masan MEATLife and Phuc Long to be on par with Masan Consumer. Profitability will be an important measure 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 the wide scope of MSN's operations. Masan will benefit from the consumption growth in Vietnam in the long term. The unit increased its target price and recommended BUY Masan 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% EBIT CAGR 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 Masan’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, HSBC International Financial Group also raised the target price of MSN shares of Masan Group Corporation to VND98,000/share. At the end of May 30, MSN's market price reached VND77,200/share. Thus, with HSBC's valuation, Masan's shares have the prospect of an upside of nearly 27%.

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. Last year, Masan Consumer set a new record profit of VND7,195 billion, up 30% compared to 2022. Thereby, helping MCH's EPS improve sharply to VND9,888/share, compared to VND7,612/share in 2022.

Source: https://www.masangroup.com/vi/news/invest-in-vietnam/with-strong-finances-masan-group-stock-is-of-interest-to-many-financial-institutions.html